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TURKEY, THE GREAT POWERS, 
AND THE BAGDAD RAILWAY 



THE MACMILLAN COMPANY 

NEW YORK • BOSTON • CHICAGO • DALLAS 
ATLANTA • SAN FRANCISCO 

MACMILLAN & CO., Limited 

LONDON • BOMBAY • CALCUTTA 
MELBOURNE 

THE MACMILLAN CO. OF CANADA, Ltd. 

TORONTO 




Turkey, The Great Powers 

and 

The Bagdad Railway 

A Study in Imperialism 


BY 



EDWARD MEAD £ARLE, Ph.D. 


ASSISTANT PROFESSOR OF HISTORY IN 
COLUMBIA UNIVERSITY 




J12fto got* 

THE MACMILLAN COMPANY 

1923 


All rights reserved 



PRINTED IN THE UNITED STATES OF AMERICA 


\ 


i 



Copyright, 1923, 

By THE MACMILLAN COMPANY. 


Set up and electrotyped. Published July, 1923. 


Press of 

J. J. Little & Ives Company 
New York, U. S. A. 

AUG -1 1923 / Q. 

©C1A752323 




“When the history of the latter part of the nineteenth cen¬ 
tury will come to be written, one event will be singled out 
above all others for its intrinsic importance and for its far- 
reaching results; namely, the conventions of 1899 and of 
1902 between His Imperial Majesty the Sultan of Turkey 
and the German Company of the Anatolian Railways.”— 
Charles Sarolea, The Bagdad Railway and German Expan¬ 
sion as a Factor in European Politics (Edinburgh, 1907), 
P- 3. 


“The Turkish Government, I know, have been accused of 
being corrupt. I venture to submit that it has not been for 
want of encouragement from Europeans that the Turks have 
been corrupt. The sinister—I think it is not going too far 
to use that word—effect of European financiers on Turkey 
has had more to do with the misgovernment than any Turk, 
young or old.”—Sir Mark Sykes, in the House of Commons, 
March 18, 1914. 








1 

m/ 



PREFACE 

The Chester concessions and the Anglo-American con¬ 
troversy regarding the Mesopotamian oilfields are but two 
conspicuous instances of the rapid development of Amer¬ 
ican activity in the Near East. Turkey, already an im¬ 
portant market for American, goods, gives promise of 
becoming a valuable source of raw materials for American 
factories and a fertile field for the investment of Ameri¬ 
can capital. Thus American religious interests in the 
Holy Land, American educational interests in Anatolia 
and Syria, and American humanitarian interests in Ar¬ 
menia, are now supplemented by substantial American 
economic interests in the natural resources of Asia Minor. 
Political stability and economic progress in Turkey no 
longer are matters of indifiference to business men and 
politicians in the United States; therefore the Eastern 
Question—so often a cause of war—assumes a new impor¬ 
tance to Americans. This book will have served a use¬ 
ful purpose if—in discussing the conflicting political, 
cultural, and economic policies of the Great Powers in 
the Near East during the past three decades—it con¬ 
tributes to a sympathetic understanding of a very com¬ 
plicated problem and suggests to the reader some dangers 
which American statesmanship would do well to avoid. 
Students of history and international relations will find 
in the story of the Bagdad Railway a laboratory full of 
rich materials for an analysis of modern economic im¬ 
perialism and its far-reaching consequences. 

The assistance of many persons who have been inti¬ 
mately associated with the Bagdad Railway has enabled 

vii 



PREFACE 


• • • 

Vlll 

the author to examine records and documents not hereto¬ 
fore available to the historian. To these persons the 
author is glad to assign a large measure of any credit 
which may accrue to this book as an authoritative and 
definitive account of German railway enterprises in the 
Near East. He wishes especially to mention: Dr. 
Arthur von Gwinner, of the Deutsche Bank, president of 
the Anatolian and Bagdad Railway Companies; Dr. Karl 
Helfiferich, formerly Imperial German Minister of 
Finance, erstwhile managing director of the Deutsche 
Bank, and at present a member of the Reichstag; Sir 
Henry Babington Smith, an associate of the late Sir 
Ernest Cassel, a director of the Bank of England, presi¬ 
dent of the National Bank of Turkey, and at one time 
representative of the British bondholders on the Ottoman 
Public Debt Administration; Djavid Bey, Ottoman Min¬ 
ister of Finance during the regime of the Young Turks, 
an economic expert at the first Lausanne Conference, and 
at present Turkish representative on the Ottoman Public 
Debt Administration; Mr. Ernest Rechnitzer, a banker 
of Paris and London, a competitor for the Bagdad Rail¬ 
way concession in 1898-1899; Rear Admiral Colby M. 
Chester, of the United States Navy (retired), beneficiary 
of the “Chester concessions.” 

Valuable assistance in the collection and preparation of 
material has been rendered, also, by the following persons, 
to whom the author expresses his grateful appreciation: 
Sir Charles P. Lucas, director, and Mr. Evans Lewin, 
librarian, of the Royal Colonial Institute; Sir John Cad- 
man, director of His Majesty’s Petroleum Department; 
Professor George Young, of the University of London, 
formerly attache of the British embassy at Constanti¬ 
nople ; Mr. Charles V. Sheehan, sub-manager in London 
of the National City Bank of New York; Mr. M. Zekeria, 
chief of the Turkish Information Service in the United 


PREFACE 


IX 


States; Mr. Rene A. Wormser, an American attorney 
who assisted the author in research work in Germany 
during the summer of 1922. Dr. Gottlieb Betz, of Co¬ 
lumbia University, and Dr. John Mez, American corre¬ 
spondent of the Frankfurter Zeitung, have aided in the 
translation of important documents. 

Professors Carlton J. H. Hayes and William R. Shep¬ 
herd, of Columbia University, have been patient advisers 
and judicious critics of the author during the preparation 
of his manuscript. To them he owes much, as teachers 
who stimulated his interest in international relations, and 
as colleagues who cheerfully cooperate in any useful en¬ 
terprise. Professor Parker Thomas Moon, of Columbia 
University, also has read the manuscript and offered 
many valuable suggestions. 

EDWARD MEAD EARLE 

Columbia University 
June, 1923 




CONTENTS 


CHAPTER PAGE 

I An Ancient Trade Route is Revived . i 

II Backward Turkey Invites Economic Exploitation 9 

Turkish Sovereignty is a Polite Formality ... 9 

The Natural Wealth of Asiatic Turkey Offers Al¬ 
luring Opportunities ......... 13 

Forces Are at Work for Regeneration .... 17 

III Germans Become Interested in the Near East . 29 

The First Rails Are Laid.29 

The Traders Follow the Investors.35 

The German Government Becomes Interested . . 38 

German Economic Interests Make for Near East¬ 
ern Imperialism.45 

IV The Sultan Mortgages His Empire.58 

The Germans Overcome Competition .... 58 

The Bagdad Railway Concession is Granted . . 67 

The Locomotive is to Supplant the Camel ... 71 

The Sultan Loosens the Purse-Strings .... 75 

Some Turkish Rights Are Safeguarded .... 81 

V Peaceful Penetration Progresses. 92 

The Financiers Get Their First Profits .... 92 

The Bankers’ Interests Become More Extensive . 97 

Broader Business Interests Develop.101 

Sea Communications Are Established .... 107 

VI The Bagdad Railway Becomes an Imperial En¬ 
terprise . 120 

Political Interests Come to the Fore .... 120 

Religious and Cultural Interests Reenforce Po¬ 
litical and Economic Motives.I 3 1 

Some Few Voices Are Raised in Protest . . . 137 


xi 









CONTENTS 


• • 

Xll 

CHAPTER 

VII Russia Resists and France is Uncertain . . . 

Russia Voices Her Displeasure. 

The French Government Hesitates. 

French Interests Are Believed to be Menaced 
The Bagdad Railway Claims French Supporters . 

VIII Great Britain Blocks the Wav. 

Early British Opinions Are Favorable . 

The British Government Yields to Pressure . 

Vested Interests Come to the Fore. 

Imperial Defence Becomes the Primary Concern . 
British Resistance is Stiffened by the Entente . 

IX The Young Turks Are Won Over. 

A Golden Opportunity Presents Itself to the En¬ 
tente Powers. 

The Germans Achieve a Diplomatic Triumph . 
The German Railways Justify Their Existence . 
The Young Turks Have Some Mental Reservations 

X Bargains Are Struck. 

The Kaiser and the Tsar Agree at Potsdam . 
French Capitalists Share in the Spoils . 

The Young Turks Conciliate Great Britain 
British Imperial Interests Are Further Safeguarded 
Diplomatic Bargaining Fails to Preserve Peace . 

XI Turkey, Crushed to Earth, Rises Again . . . 

Nationalism and Militarism Triumph at Constanti¬ 
nople . 

Asiatic Turkey Becomes One of the Stakes of the 
War. 

Germany Wins Temporary Domination of the 
Near East. 

“Berlin to Bagdad” Becomes but a Memory . 

To the Victors Belong the Spoils. 

“The Ottoman Empire is Dead. Long Live 
Turkey!”. 

XII The Struggle for the Bagdad Railway is Resumed 

Germany is Eliminated and Russia Withdraws . 

France Steals a March and is Accompanied by 
Italy. 


PAGE 

147 

147 

153 

157 

165 

176 

176 

180 

189 

195 

202 

217 


229 

235 

239 

239 

244 

252 

258 

266 

275 

275 

279 

287 

292 

300 

303 

314 

314 

318 












CONTENTS 


PAGB 

British Interests Acquire a Claim to the Bagdad 
Railway.3 2 7 

America Embarks on an Uncharted Sea . . . 336 

Index. 355 

MAPS 

The Railways of Asiatic Turkey . . . Frontispiece 

The Chester Concessions.340 








TURKEY, THE GREAT POWERS 
AND THE BAGDAD RAILWAY 

A Study in Imperialism 


AN ANCIENT TRADE ROUTE IS REVIVED 

Many a glowing tale has been told of the great Com¬ 
mercial Revolution of the sixteenth century and of the 
consequent partial abandonment of the trans-Asiatic trade 
routes to India in favor of the newer routes by water 
around the Cape of Good Hope. It is sometimes over¬ 
looked, however, that a commercial revolution of the nine¬ 
teenth century, occasioned by the adaptation of the steam 
engine to land and marine transportation, was of perhaps 
equal significance. Cheap carriage by the ocean grey¬ 
hound instead of the stately clipper, by locomotive-drawn 
trains instead of stage-coach and caravan, made possible 
the extension of trade to the innermost and outermost 
parts of the earth and increased the volume of the world’s 
commerce to undreamed of proportions. This latter com¬ 
mercial revolution led not only to the opening of new 
avenues of communication, but also to the regeneration of 
trade-routes which had been dormant or decayed for cen¬ 
turies. During the nineteenth century and the early part 
of the twentieth, the medieval trans-Asiatic highways 
to the East were rediscovered. 

The first of these medieval trade-routes to be revived 


i 





2 


THE BAGDAD RAILWAY 


by modern commerce was the so-called southern route. 
In the fifteenth century curious Oriental craft had brought 
their wares from eastern Asia across the Indian Ocean 
and up the Red Sea to some convenient port on the Egyp¬ 
tian shore; here their cargoes were trans-shipped via 
caravan to Alexandria and Cairo, marts of trade with the 
European cities of the Mediterranean. The completion 
of the Suez Canal, in 1869, transformed this route of 
medieval merchants into an avenue of modern transporta¬ 
tion, incidentally realizing the dream of Portuguese and 
Spanish explorers of centuries before—a short, all-water 
route to the Indies. Less than forty years later the north¬ 
ern route of medieval commerce—from the “back doors” 
of China and India to the plains of European Russia— 
was opened to the twentieth-century locomotive. With 
the completion of the Trans-Siberian Railway in 1905 
the old caravan trails were paralleled with steel rails. The 
Trans-Siberian system linked Moscow and Petrograd 
with Vladivostok and Pekin; the Trans-Caspian and 
Trans-Persian railways stretched almost to the mountain 
barrier of northern India; the Trans-Caucasian lines pro¬ 
vided the link between the Caspian and Black Seas. 

The heart of the central route of Eastern trade in the 
fifteenth century was the Mesopotamian Valley. Oriental 
sailing vessels brought commodities up the Persian Gulf 
to Basra and thence up the Shatt-el-Arab and the Tigris 
to Bagdad. At this point the route divided, one branch fol¬ 
lowing the valley of the Tigris to a point north of Mosul 
and thence across the desert to Aleppo; another utilizing 
the valley of the Euphrates for a distance before striking 
across the desert to the ports of Syria; another crossing the 
mountains into Persia. From northern Mesopotamia and 
northern Syria caravans crossed Armenia and Anatolia 
to Constantinople. This historic highway—the last of 
the three great medieval trade-routes to be opened to 


AN ANCIENT TRADE ROUTE IS REVIVED 


modern transportation—was traversed by the Bagdad 
Railway. The locomotive provided a new short cut to 
the East. 

That a commercial revolution of the nineteenth century 
should revive the old avenues of trade with the East was 
a matter of the utmost importance to all mankind. To 
the Western World the expansion of European commerce 
and the extension of 'Occidental civilization were incal¬ 
culable, but certain, benefits. Statesmen and soldiers, 
merchants and missionaries alike might hail the new rail¬ 
ways and steamship lines as entitled to a place among 
the foremost achievements of the age of steel and steam. 
To the East, also, closer contacts with the West held out 
high hopes for an economic and cultural renaissance of 
the former great civilizations of the Orient. Alas, how¬ 
ever, the reopening of the medieval trade-routes served to 
create new arenas of imperial friction, to heighten existing 
international rivalries, and to widen the gulf of suspicion 
and hate already hindering cordial relationships between 
the peoples of Europe and the peoples of Asia. Economic 
rivalries, military alliances, national pride, strategic ma¬ 
neuvers, religious fanaticism, racial prejudices, secret di¬ 
plomacy, predatory imperialism—these and other formi¬ 
dable obstacles blocked the road to peaceful progress and 
promoted .w ars and rumors of wars. The purchase of 
the Suez Canal by Disraeli was but the first step in the 
acquisition of Egypt, an imperial experiment which cost 
Great Britain thousands of lives, which more than once 
brought the empire to the verge of war with France, and 
which colored the whole character of British diplomacy 
in the Middle East for forty years. No sooner was the 
Trans-Siberian Railway completed than it involved Russia 
in a war with Japan. So it was destined to be with the 
Bagdad Railway. Itself a project of great promise for 
the economic and political regeneration of the Near East, 







4 


THE BAGDAD RAILWAY 


it became the source of bitter international rivalries which 
contributed to the outbreak of the Great War. It is one 
of the tragedies of the nineteenth and twentieth centuries 
that the Trans-Siberian Railway, the Suez Canal, and the 
Bagdad Railway—potent instruments of civilization for 
the promotion of peaceful progress and material pros¬ 
perity—could not have been constructed without occasion¬ 
ing imperial friction, political intrigues, military alliances, 
and armed conflict. 

The geographical position of the Ottoman Empire, 
the enormous potential wealth of its dominions, and the 
political instability of the Sultan’s Government contributed 
to make the Bagdad Railway one of the foremost imperial 
problems of the twentieth century. At the time of the 
Bagdad Railway concession of 1903 Turkey held dominion 
over the Asiatic threshold of Europe, Anatolia, and the 
European threshold of Asia, the Balkan Peninsula. Con¬ 
stantinople, the capital of the empire, was the economic 
and strategic center of gravity for the Black Sea and east¬ 
ern Mediterranean basins. By possession of northern 
Syria and Mesopotamia, the Sultan controlled the “cen¬ 
tral route” of Eastern trade throughout its entire length 
from the borders of Austria-Hungary to the shores of 
the Persian Gulf. The contiguity of Ottoman territory 
to the Sinai Peninsula and to Persia held out the possi¬ 
bility of a Turkish attack on the Suez and trans-Persian 
routes to India and the Far East. In fact, the Sultan’s 
dominions from Macedonia to southern Mesopotamia 
constituted a broad avenue of communication, an historic 
world highway, between the Occident and the Orient. 
To a strong nation, this position would have been a source 
of strength. To a weak nation it was a source of weak¬ 
ness. As Gibraltar and Suez and Panama were staked 
out by the empire-builders, so were Constantinople and 
Smyrna and Koweit. Strategically, the region traversed 


AN ANCIENT TRADE ROUTE IS REVIVED 


5 


by the Bagdad Railway is one of the most important in 
the world. 

Turkey-in-Asia, furthermore, was wealthy. It pos¬ 
sessed vast resources of some of the most essential ma¬ 
terials of modern industry: minerals, fuel, lubricants, abra¬ 
sives. Its deposits of oil alone were enough to arouse the 
cupidity of the Great Powers. Irrigation, it was believed, 
would accomplish wonders in the revival of the ancient 
fertility of Mesopotamia. By the development of the 
country’s latent agricultural wealth and the utilization of 
its industrial potentialities, it was anticipated that the Otto¬ 
man Ehipire would prove a valuable source of essential 
raw materials, a satisfactory market for finished products, 
and a rich field for the investment of capital. Economically} 
the territory served by the Bagdad Railway was one of the 
most important undeveloped regions of the world. 

Neither the geographical position nor the economic 
wealth of the Ottoman Empire, however, need have been 
a cause for its exploitation by foreigners. Had the Sul¬ 
tan’s Government been strong—powerful enough to pre¬ 
sent determined resistance to domestic rebellion and for¬ 
eign intrigue—Turkey would not have been an imperial 
problem. But Abdul Hamid and his successors, the Young 
' Turks, showed themselves incapable of governing a vast 
i empire and a heterogeneous population. They were un¬ 
able to resist the encroachments of foreigners on the 
administrative independence of their country or to defend 
its borders against foreign invasion. That the Ottoman 
Empire, under these circumstances, should fall a prey 
to the imperialism of the Western nations was to be 
expected. Its strategic importance was a ‘‘problem” of 
military and naval experts. Its wealth was an irresistible 
lure to investors. Its political instability was the excuse 
offered by European nations for intervening in the affairs 
of the empire on behalf of the financial interests of the 


6 


THE BAGDAD RAILWAY 


business men or the strategic interests of the empire- 
builders. Diplomatically, then, the region traversed by 
the Bagdad Railway was an international “danger zone.” 

The problem of maintaining stable government in Tur¬ 
key was complicated by the religious heritage of the Otto¬ 
man Empire. It was the homeland of the Jews, the birth¬ 
place of Christianity, the cradle of Mohammedanism. 
European crusaders had waged war to free the Holy Land 
from Moslem desecrators; the followers of the Prophet 
had shed their blood in defence of this sacred soil against 
infidel invaders; the sons of Israel looked forward to a 
revival of Jewish national life in this, their Zion. It is 
small wonder that Turkey-in-Asia was a great field for 
missions—Protestant missions to convert the Mohamme¬ 
dan to the teachings of Christ; Catholic missions to win 
over, as well, the schismatics; Orthodox missions to re¬ 
tain the loyalty of adherents to the Greek Church. Despite 
their cultural importance in the development of modern 
Turkey, the missions presented serious political problems 
to the Sultan. They hindered the development of Turkish 
nationalism by teaching foreign languages, by strengthen¬ 
ing the separatist spirit of the religious minorities, and by 
introducing Occidental ideas and customs. They weak¬ 
ened the autocracy by idealizing the democratic institu¬ 
tions of the Western nations. They occasioned interna¬ 
tional complications, arising out of diplomatic protection 
of the missionaries themselves and the racial and religious 
minorities in whose interest the missions were maintained. 
In no country more than in Turkey have the emissaries 
of religion proved to be so valuable—however unwittingly 
—as advance pickets of imperialism. 

Complicating and bewildering as the Near Eastern 
question always has been, the construction of the Ana¬ 
tolian and Bagdad Railways made it the more complicat¬ 
ing and bewildering. The development of rail transporta- 


AN ANCIENT TRADE ROUTE IS REVIVED 7 


tion in the Ottoman Empire was certain to raise a new 
crop of problems: the strategic problem of adjusting mili¬ 
tary preparations to meet new conditions; the economic 
problem of exploiting the great natural wealth of Turkey- 
in-Asia; the political problem of prescribing for a “Sick 
Man” who was determined to take iron as a tonic. These 
problems, of course, were international as well as Ottoman 
in their aspects. The economic and diplomatic advance of 
Germany in the Near East, the resurgent power of Turkey, 
the military cooperation between the Governments of the 
Kaiser and the Sultan were not matters which the other 
European powers were disposed to overlook. Russia, 
pursuing her time-honored policy, objected to any bolster¬ 
ing up of the Ottoman Empire. France looked with alarm 
upon the advent of another power in Turkish financial 
affairs and, in addition, was desirous of promoting the 
political ambitions of her ally, Russia. Great Britain be¬ 
came fearful of the safety of her communications with 
India and Egypt. Thus the Bagdad Railway overstepped 
the bounds of Turco-German relationships and became 
an international diplomatic problem. It was a concern of 
foreign offices as well as counting houses, of statesmen 
and soldiers, as well as engineers and bankers. 

The year 1888 ushered in an epoch of three decades dur¬ 
ing which two cross-currents were at work in Turkey. 
On the one hand, earnest efforts were made by Turks, 
old and young, to bring about the political and economic 
regeneration of their country. On the other, the steady 
growth of Balkan nationalism, the relentless pressure of 
European imperialism, and the devastation of the Great 
War gradually reduced to ruins the once great empire of 
Suleiman the Magnificent. The history of those three 
decades is concerned largely with the struggles of European 
capitalists to acquire profitable concessions in Asiatic 
Turkey and of European diplomatists to control the 


8 


THE BAGDAD RAILWAY 


finances, the vital routes of communication, and even the 
administrative powers of the Ottoman Government. The 
coincidence between the economic motives of the investors 
and the political and strategical motives of the statesmen, 
made Turkey one of the world’s foremost areas of imperial 
friction. Its territories and its natural wealth were “stakes 
of diplomacy” for which cabinets maneuvered on the diplo¬ 
matic checkerboard and for which the flower of the world’s 
manhood fought on the sands of Mesopotamia, the cliffs 
of Gallipoli, and the plains of Flanders. To tell the story 
of the Bagdad Railway is to emphasize perhaps the most 
important single factor in the history of Turkey during 
the last thirty eventful years. 


CHAPTER n 


BACKWARD TURKEY INVITES ECONOMIC 

EXPLOITATION 

Turkish Sovereignty is a Polite Formality 

The reign of Sultan Abdul Hamid II (1876-1909) be¬ 
gan with a disastrous foreign war; it terminated in the 
turmoil of revolution. And during the intervening 
three decades of his regime the Ottoman Empire was 
forced to wage a fight for its very existence—a fight 
against disintegration from within and against dismem¬ 
berment from without. 

One of the principal problems of Abdul Hamid was 
the government of his vast empire in spite of domestic 
dissension and foreign interference. His subjects were 
a polyglot collection of peoples, bound together by few, 
if any, common ties, obedient to the Sultan’s will only 
when overawed by military force. In Turkey-in-Asia 
alone, Turks, Arabs, Armenians, Kurds, Jews, Greeks 
combined to form a conglomerate population, professing 
a variety of religious faiths, speaking a diversity of lan¬ 
guages and dialects, and adhering to their own peculiar 
social customs. Of these, the Armenians were receiving 
the sympathy, support, and encouragement of Russia; the 
Kurds were living by banditry, terrorizing peasants and 
traders alike; the Arabs were in open revolt. 1 

Nature seemed to make more difficult the task of bring¬ 
ing these dissentient peoples under subjection. The 
mountainous relief of the Anatolian plateau lent itself to 

9 


10 


THE BAGDAD RAILWAY 


the success of guerrilla bands against the gendarmerie; 
a high mountain barrier separated Anatolia, the home¬ 
land of the Turks, from the hills and deserts of Syria 
and Mesopotamia, the strongholds of the Arabs. The 
vast extent of the empire—it is as far from Constanti¬ 
nople to Mocha as it is from New York to San Francisco 
—still further complicated an already tangled problem, 
for there were not even the poorest means of communi¬ 
cation. Under these circumstances the authority of the 
Sultan was as often disregarded as obeyed. To police 
the country from the Adriatic to the Indian Ocean, from 
the borders of Persia to the eastern coast of the Mediter¬ 
ranean, was a physical impossibility. Universal military 
service was enforced only in the less rebellious provinces. 
It was almost out of the question to mobilize the military 
strength of the empire for defence against foreign inva¬ 
sion or for the suppression of domestic insurrection. 
Efforts to build up effective administration from Con¬ 
stantinople were paralyzed by incompetent, insubordi¬ 
nate, and corrupt officials. 2 

To these problems of maintaining peace and order at 
home there was added the equally difficult problem of 
preventing the extension of foreign interference and 
control in Ottoman affairs. The integrity of Turkey 
already was seriously compromised by the hold which the 
Great Powers possessed on Turkish governmental func¬ 
tions. Under the Capitulations foreigners occupied a 
special and privileged position within the Ottoman Em¬ 
pire. Nationals of the European nations and the United 
States were practically exempt from taxation; they could 
be tried for civil and criminal offences only under the 
laws of their own country and in courts under the juris¬ 
diction of their own diplomatic and consular officials; in 
fact, they enjoyed favors comparable to diplomatic im¬ 
munity. By virtue of treaties with the Sultan the Powers 


TURKEY INVITES ECONOMIC EXPLOITATION n 


exercised numerous extra-territorial rights in Turkey, 
such, for example, as the maintenance of their own postal 
systems. 3 

The finances of Turkey, furthermore, were under the 
control of the Ottoman Public Debt Administration, 
composed almost entirely of representatives of foreign 
bondholders and responsible only to them. The Council 
of Administration of the Public Debt—composed of one 
representative each from the United Kingdom, France, 
Germany, Austria-Hungary, Italy, and Turkey—had 
complete control of assessment, collection, and expendi¬ 
ture of certain designated revenues. In fact, it con¬ 
trolled Ottoman financial policy and exercised its con¬ 
trol in the interest of European bankers and investors. 
Customs duties of the Sultan’s dominions might be in¬ 
creased only with the consent of the Great Powers. Al¬ 
most all administrative and financial questions in Turkey 
were directly or indirectly subject to the sanction of for¬ 
eigners. 4 

European governments were not content to interfere in 
the affairs of the Ottoman Empire. They sought to de¬ 
stroy it. Their zeal in this latter respect was limited 
only by their jealousies as to who should become the 
heir of the Sick Man. Russia encouraged the Balkan 
and Transcaucasian peoples to resist Turkish domina¬ 
tion; France acquired control of Tunis and built up a 
sphere of interest in Syria; Great Britain occupied 
Egypt; Italy cast longing glances at Tripoli and finally 
seized it; Greece fomented insurrection in Crete. Ger¬ 
many and Austria-Hungary sought to bring all of Tur¬ 
key into the economic and political orbit of Central 
Europe. The Powers rendered lip-service to the sover¬ 
eignty and the territorial integrity of the Ottoman Em¬ 
pire, but they never allowed their solemn professions to 
interfere with their imperial practices. At best Turkish 


12 


THE BAGDAD RAILWAY 


sovereignty was a polite fiction—it was always a fiction, 
if not always polite. 

The economic backwardness of Turkey emphasized the 
existing political confusion and instability. From one 
end of the empire to the other, it seemed, obstacle was 
piled on obstacle to prevent the modernizing of the na¬ 
tion. Brigandage made trade hazardous; there were al¬ 
most no roads; the rivers of Anatolia and Cilicia were 
not navigable; the mineral resources of the country had 
been neglected; internal and foreign customs duties were 
the last straws to break the camel’s back—business was 
taxed to death. Agriculture, the occupation of the great 
majority of the people, was in a state of stagnation. The 
absence of systems of drainage and irrigation made the 
countryside the victim of alternate floods and droughts. 
Methods of cultivation were archaic: the wooden plow, 
used by the Hittites centuries before, was among the 
most advanced types of agricultural implements in use in 
Anatolia and Syria; harvesting and threshing were per¬ 
formed in the most antiquated manner; fertilization and 
cultivation were practically unknown. Markets were in¬ 
accessible; the peasant could not dispose of a surplus if 
he had it; therefore, production was limited to the needs 
of the family, and the Turkish peasant acquired a wide¬ 
spread reputation for inherent laziness. 

Industrially, the Ottoman Empire had back of it a great 
past. The fine and dainty fabrics of Mosul; the famous 
mosque lamps, wonder-art of the glass-workers of Meso¬ 
potamia ; the master workmanship of the coppersmiths of 
Diarbekr; the tiles of Erzerum; the steel work and the 
enamels of Damascus—all of these had been far-famed 
articles of world commerce for centuries. But Turkey 
in the nineteenth and twentieth centuries was, industrially 
as well as politically, a “backward nation.” Her manu¬ 
factures were conducted under the time-honored handi- 


TURKEY INVITES ECONOMIC EXPLOITATION 13 


craft system, which long since had been discarded by her 
European neighbors. In other words, Turkey had not 
experienced the Industrial Revolution which was the mod-^ 
ern foundation of Western society a,nd civilization. But 
Turkey was victimized by the Industrial Revolution. Her 
manufactures—with the exception of some luxuries of 
incomparable craftsmanship—produced by outworn 

methods, found it increasingly difficult to compete even 
in the markets of the Ottoman Empire with the cheaper 
machine-made goods of Europe. The pitiless competition 
of the industrialized West eliminated the cottage spinner 
and weaver, the town tailor and cobbler. And yet for 
Turkey to adopt European methods—to introduce the ma¬ 
chine, the factory, and the factory town—was for a time 
impracticable. There was no mobile fund of capital for 
the purpose, and even Young Turks were not in a position 
to furnish the necessary technical skill. As for foreign 
capital and foreign directing genius, they could be obtained 
only under promises and guarantees which might still 
further jeopardize the independence of the Ottoman 
Empire. 8 

The Natural Wealth of Asiatic Turkey Offers 

Alluring Opportunities 

It was not because of a lack of natural resources that 
Turkey was a “backward nation.” The Sultan’s Asiatic 
dominions were rich in raw materials, in fuel, and in agri¬ 
cultural possibilities. Anatolia, for example, is a great 
storehouse of important metals. A fine quality of chrome 
ore is to be found in the region directly south of the Sea 
of Marmora and in Cilicia, constituting sources of supply 
which were sufficient to assure Turkey first position among 
the chrome-producing nations until 1900, when exports 
from Russia and Rhodesia offered serious competition. 


H 


THE BAGDAD RAILWAY 


There are valuable deposits of antimony in the vilayets 
of Brusa and Smyrna, as well as commercially profitable 
lead and zinc mines near Brusa, Ismid, and Konia. These 
metals, particularly chrome and antimony, are not only 
valuable for peace-time industry, but are almost indispen¬ 
sable in the manufacture of armor-plate, shells and shrap¬ 
nel, guns, and armor-piercing projectiles. 6 

In the vicinity of Diarbekr there are mines, which, 
although not entirely surveyed, promise to yield large sup¬ 
plies of copper. Southern Anatolia is the world’s greatest 
source of emery and other similar abrasives. The famous 
meerschaum mines near Eski Shehr enjoy practically a 
universal monopoly. Boracite, mercury, nickel, iron, man¬ 
ganese, sulphur, and other minerals are to be found in 
Anatolia, although there is some question of the com¬ 
mercial possibilities of the deposits. 7 

Although Anatolia is not ranked among the principal 
fuel-producing countries of the world, its coal deposits 
are not inconsiderable. Operation of the chief of the coal¬ 
fields, in the vicinity of Heraclea, was begun in 1896 by 
a French corporation, La Societe frangaise d’Heraclee, 
which invested in the enterprise during the succeeding 
seven years more than a million francs. The venture 
proved to be profitable, for by 1910 the mines were pro¬ 
ducing in excess of half a million tons of coal annually. 
In addition to coal, Anatolia possesses large deposits of 
lignite which, mixed with coal, is suitable fuel for ships, 
locomotives, gasworks, and factories. 8 

Oil exists in large quantities in Mesopotamia and in 
smaller quantities in Syria. The deposits are said to be 
part of a vast petroliferous area stretching from the shores 
of the Caspian Sea to the coast of Burma. As early as ' 
1871 a commission of experts visited the valleys of the 
Tigris and the Euphrates for the purpose of studying the 
possibility of immediate exploitation of the petroleum wells 


TURKEY INVITES ECONOMIC EXPLOITATION 15 

in that region. They reported that although there was a 
plentiful supply of petroleum of good quality, difficulties 
of transportation made it extremely doubtful if the 
Mesopotamian fields could compete with the Russian and 
American at that time. The oil supply was then being 
exploited on a small scale by the Arabs and proved to be 
of sufficient local importance, as well as of sufficient profit, 
to warrant its being taken over by the Ottoman Civil List, 
in 1888, as a government monopoly. 9 

In 1901 a favorable report by a German technical com¬ 
mission on Mesopotamian petroleum resources stated that 
the region was a veritable “lake of petroleum” of almost 
inexhaustible supply. It would be advisable, it was pointed 
out, to develop these oilfields if for no other purpose than 
to break the grip of the “omnipotent Standard,” which, 
in combination with Russian interests, might speedily 
monopolize the world’s supply. 10 Shortly afterward, Dr. 
Paul Rohrbach, a celebrated German publicist, visited the 
Mesopotamian valley and wrote that the district seemed 
to be “virtually soaked with bitumen, naphtha, and gaseous 
hydrocarbons.” He was of the opinion that the oil re¬ 
sources of the region offered far greater opportunity for 
profitable development than had the Russian Transcau¬ 
casian fields. 11 In 1904 the Deutsche Bank, of Berlin, 
promoters of the Bagdad Railway, obtained the privilege 
of making a thorough survey of the oilfields of the Tigris 
and Euphrates valleys, with the option within one year of 
entering into a contract with the Ottoman Government 
for their exploitation. 12 Shortly thereafter Rear Admiral 
Colby M. Chester, of the United States Navy, became in¬ 
terested in the development of the oil industry in Asiatic 
Turkey. 13 

The Near East possesses not only mineral wealth but 
potential agricultural wealth as well. Mesopotamia, for 
example, gives promise of becoming one of the world’s 


i6 


THE BAGDAD RAILWAY 


chief cotton-growing regions. In antiquity the Land of 
the Two Rivers was an important center of cotton produc¬ 
tion, and recent experiments have held out great induce¬ 
ments for a revival of cotton culture there. The climate 
of Mesopotamia is ideal for such a purpose. The length 
of the summer season is from six to seven months, with 
a constantly rising temperature, as contrasted with a 
shorter season and variable temperatures in America and 
Egypt. Frost is almost unknown. Rainfall is plentiful 
during the early part of the year and scarce, as it should be, 
during the growing period. The soil contains a good per¬ 
centage of the essential phosphorus, potash, and nitrogen. 
It is believed that Mesopotamia can grow cotton as good 
as the best Egyptian and better than the best American 
product and at a considerably higher yield per acre. 14 

Extravagant prophecies have been made regarding the 
role of irrigation in bringing about an agricultural renais¬ 
sance in Turkey-in-Asia. A writer in the Vienna Zeit of 
August 31, 1901, predicted that as soon as the economic 
effects of irrigation and of the Bagdad Railway should be 
fully realized, “Anatolia, northern Syria, Mesopotamia, 
and Irak together will export at least as much grain as 
all of Russia exports to-day.” Dr. Rohrbach claimed that 
this probably would prove to be an exaggeration, but that 
certainly Mesopotamia would become one of the great 
granaries of the world. 15 Sir William Willcocks, the dis¬ 
tinguished English engineer who had planned and super¬ 
vised the construction of the famous irrigation works of 
the Nile, was no less enthusiastic about the prospects of 
Mesopotamia. “With the Euphrates and Tigris floods 
really controlled, 1 ” he wrote, “the delta of the two rivers 
would attain a fertility of which history has no record; 
and we should see men coming from the West, as well as 
from the East, making the Plain of Shinar a rival of the 
land of Egypt. The flaming swords of inundation and 


TURKEY INVITES ECONOMIC EXPLOITATION 17 

drought would have been taken out of the hands of the 
offended Seraphim, and the Garden of Eden would have 
again been planted. . . . Speaking in less poetical language 
we might say that the value of every acre in the joint 
delta of the two rivers would be immediately trebled before 
the irrigation works were carried out, and again increased 
many fold more the day the works were completed. Every 
town and hamlet in the valley from Bagdad to Basra 
would find itself freed from the danger, expense, and in¬ 
tolerable nuisance of flooding, and the resurrection of 
this ancient land would have been an accomplished fact.” 18 

Here in the Near East, then, was a great empire await¬ 
ing exploitation by Western capital and Western technical 
skill. No man could adequately predict its ultimate con¬ 
tributions in raw materials to Western industry, or accu¬ 
rately foretell its ultimate capacity in consumption of the 
products of Western factories, or confidently prophesy 
its final role in the promotion of Western commerce. But 
a trained and intelligent observer, surveying the situation 
at the opening of the twentieth century, could have said 
with a certain amount of assurance that there were two 
essential conditions to even a partial realization of the 
economic possibilities of the Ottoman Empire: the pro¬ 
vision of adequate railway communications and the es¬ 
tablishment of political security. The former of these 
conditions was met, in part, during the regime of Abdul 
Hamid and his successors, the Young Turks. The second, 
in spite of earnest efforts by loyal Ottomans, has not yet 
been satisfied. 

Forces Are at Work for Regeneration 

Probably there was no group of men more fully aware 
of the needs of Turkey than the members of the Ottoman 
Public Debt Administration. They were concerned, it is 


i8 


THE BAGDAD RAILWAY 


true, solely with obtaining prompt payment of interest 
and principal of Ottoman bonds and with improving Otto¬ 
man credit in European financial markets. But the ac¬ 
complishment of this purpose, they realized, was alto¬ 
gether out of the question in the continued presence of 
political instability and economic stagnation. One must 
feed the goose which lays the golden eggs. They sought 
some means, therefore, of establishing domestic order in 
the Ottoman Empire, of lessening the constant danger 
of foreign invasion, and of providing a tonic for the 
economic life of the nation. All of these purposes, it was 
believed, would be served by the encouragement of railway 
construction in Turkey. 

The interest and imagination of the Ottoman Public 
Debt Administration were stimulated by the plans of the 
eminent German railway engineer Wilhelm von Pressel, 
one of the Sultan’s technical advisers. Von Pressel had 
established an international reputation because of his serv¬ 
ices in the construction of important railways in Switzer¬ 
land and the Tyrol. In 1872 he was retained by the Otto¬ 
man Government to develop plans for railways in Turkey, 
and a few years later he assumed a prominent part in 
the construction of the trans-Balkan lines of the Oriental 
Railways Company. No one knew more than von Pressel 
of the railway problems of Turkey; few were more en¬ 
thusiastic about the role which rail communications might 
play in a renaissance of the Near East. 

Von Pressel foresaw the possibility of establishing a 
great system of Ottoman railways extending from the 
borders of Austria-Hungary to the shores of the Persian 
Gulf. In this manner the far-flung territories of the 
empire would be brought into communication with one 
another and with the capital, and an era would be begun 
of unprecedented development in agriculture, mining, 
and commerce. A market would be provided for the crops 


TURKEY INVITES ECONOMIC EXPLOITATION 19 

of the peasantry; the hinterland of the ports of Con¬ 
stantinople, Smyrna, Mersina, Alexandretta, and Basra 
would be opened up; heretofore inaccessible mineral re¬ 
sources would be exploited. Foreign commerce might be 
restored to the prosperity it had once enjoyed before the 
Commercial Revolution of the sixteenth century replaced 
the caravan routes of the Near East by the new sea routes 
to the Indies. Mesopotamia might be transformed into 
a veritable economic paradise. The railways also would 
insure political stability, for rapid mobilization and trans¬ 
portation of the gendarmerie to danger points would enable 
the Sultan’s Government to suppress rebellions of the 
turbulent tribesmen of Kurdistan, Mesopotamia, and 
Arabia. Peace and prosperity were goals within easy 
reach, thought von Pressel, if Turkey could be provided 
with a comprehensive system of railways. 17 

To the Ottoman Public Debt Administration peace and 
prosperity were means to reaching another goal—a full 
treasury. Greater income for the Turkish farmer, miner, 
artisan, and trader would mean greater opportunities for 
the extension of tax levies. And the greater the tax re¬ 
ceipts the greater would be the payments to the European 
bondholders and the greater the value of the bonds them¬ 
selves. Obviously, railway construction would improve 
Turkish credit in the financial centers of the world. But, 
for the time, the Ottoman Government had at its disposal 
neither the capital nor the technical skill to carry into 
execution the plans for an ambitious program of railway 
building, and private enterprise showed no disposition to 
interest itself without substantial guarantees. It was under 
these circumstances, therefore, that the Ottoman Public 
Debt Administration recommended to the Sultan that cer¬ 
tain revenues of his empire should be set aside for the 
payment of subsidies to railway companies. 18 

The Public Debt Administration were not unaware that 


20 


THE BAGDAD RAILWAY 


the payment of railway subsidies would materially in¬ 
crease the amount of the imperial debt and mortgage cer¬ 
tain of the imperial revenues. But they were confident 
that railways would be a powerful stimulant to economic 
prosperity in Turkey and would ultimately increase the 
revenues of the Government by an amount in excess of 
the amount of the subsidies. They believed that generous 
initial expenditures in a worth-while enterprise might 
yield generous final returns. As an instance of this they 
could point to the development of sericulture in Turkey. 
Under the auspices of the Ottoman Public Debt Adminis¬ 
tration tens of thousands of dollars were expended in the 
reclamation of more than 130,000 acres of land and the 
planting thereon of over sixty million mulberry trees. As 
a result, the silk crop increased more than tenfold during 
the years 1890-1910, with a result that there was a corre¬ 
sponding increase in the 10% levy (or tithe) on agricul¬ 
tural products in the regions affected. If the Public Debt 
Administration were actuated by self-interest, at least it 
was intelligent and far-sighted self-interest. 19 

But Sultan Abdul Hamid was no less interested than 
foreign bondholders in the extension of railway construc¬ 
tion in his empire. Railways could be utilized, he believed, 
to serve his dynastic and imperial ambitions. Effective 
transportation was essential to the solution of at least 
three vexatious political problems: first, the problem of 
exercising real, as well as nominal, authority over re¬ 
bellious and indifferent subjects in Syria, Mesopotamia, 
Kurdistan, Arabia, and other outlying provinces; second, 
the problem of compelling these provinces, by military 
force if necessary, to contribute their share of blood and 
treasure to the defence of the empire; 20 third, the problem 
of perfecting a plan of mobilization for war, on whatever 
front it might be necessary to conduct hostilities. The 
maintenance of order, the enforcement of universal mili- 


TURKEY INVITES ECONOMIC EXPLOITATION 21 


tary service, the collection of taxes in all provinces of the 
empire, and defence against foreign invasion—all of these 
policies would be seriously handicapped, if not paralyzed, 
by the absence of adequate railway communications. 

For strategic reasons, if for no other, Abdul Hamid 
would have especially favored the Bagdad Railway. For 
strategic reasons, also, he supplemented the Bagdad sys¬ 
tem with the famous Hedjaz Railway—from Damascus 
to the holy cities of Medina and Mecca—one of the achieve¬ 
ments of which the wily old Sultan was most proud. 21 
The completion of these two railways would have extended 
Turkish military power from the Black Sea to the Persian 
Gulf, from the Bosporus to the Persian Gulf. General 
von der Goltz epitomized their military importance in the 
following terms: “The great distance dividing the south¬ 
ern provinces from the rest of the empire was not the 
only difficulty in holding them in control; it made Turkey 
unable to concentrate her strength in case of great danger 
in the north. It must not be forgotten that the Osmanlie 
Empire in all former wars on the Danube and in the 
Balkans has only been able to utilize half her forces. Not 
only did the far-off provinces not contribute men, but, on 
the contrary, they necessitated strong reenforcements to 
prevent the danger of their being tempted into rebellion. 
This will be quite changed when the railroads to the 
Persian Gulf and the Red Sea are completed. The empire 
will then be rejuvenated and have renewed strength.” 22 
The General might have added that the new railways might 
conceivably be utilized for the transportation to the Sinai 
Peninsula of an army intended to threaten the Suez 
Canal and Egypt. 23 

The Ottoman Government made it plain from the very 
start that the Bagdad Railway, in particular, was intended 
to serve military, as well as purely economic, purposes. 
The concession of 1903 contained a number of explicit 


22 


THE BAGDAD RAILWAY 


provisions regarding official commandeering of the lines 
for the objects of suppressing rebellion, conducting mili¬ 
tary maneuvers, or mobilizing in the event of war. Fur¬ 
thermore, the Ottoman military authorities insisted that 
strategic considerations be taken into account when the 
railway was constructed. For example, the sections of 
the Bagdad line from Adana to Aleppo were carried 
through the Amanus Mountains, in spite of formidable 
engineering difficulties and enormous expense, although 
the railway could have been carried along the Mediter¬ 
ranean coast with greater ease and economy. The latter 
course, however, would have exposed to the guns of a 
hostile fleet the jugular vein of Turkish rail communica¬ 
tions. From an economic point of view the Amanus tun¬ 
nels were the most expensive and most unremunerative 
part of the Bagdad Railway; strategically, they were indis¬ 
pensable. This point was emphasized in 1908, when the 
Ottoman General Staff refused to consider a proposal 
to divert the line from the mountain passes to the shore. 24 

One of the most frequent criticisms of Turkish railway 
enterprises in general, and of the Bagdad Railway in par¬ 
ticular, is that they were military as well as economic in 
character. Such criticisms, however, must be discounted, 
for potentially every railway is of military value. And in 
the European countries few railways were constructed 
without frank consideration of their adaptability to mili¬ 
tary purposes in time of war. Railways, in fact, were one 
of the most important branches of Europe’s “prepared¬ 
ness'’ for war. Which European nation, therefore, was in 
a position to cast a stone at Turkey for adopting this lesson 
from the civilized Occident? If the Ottoman Empire had 
a right to prepare for defence against invasion, it had the 
right to make that defence effective—at least until such 
time as its neighbors, Russia and Austria, should abandon 
military measures of potential menace to Turkey. 


TURKEY INVITES ECONOMIC EXPLOITATION 23 

Germans and Turkish Nationalists contended that there 
was a certain amount of cant in the righteous indignation 
of the Powers that Turkey should become militaristic. 
Was Russia, they said, as much interested in the welfare 
of Turkey as she was angered at the active measures of 
the Sultan to prevent a Russian drive at Constantinople 
via the southern shore of the Black Sea ? Was France as 
much concerned with the safety of Turkey as she was 
solicitous of the imperial interests of her ally? Was Great 
Britain engaged in preserving the peace of the Near East, 
or was she fearful of a stiffened Turkish defence of 
Mesopotamia or of a Turkish thrust at Egypt? 25 For 
the Sultan to have admitted that foreign powers had the 
right to dictate what measures he might or might not 
take for the defence of his territories would have been 
equivalent to a surrender of the last vestige of his 
sovereignty. Obviously this was an admission he could 
not afford to make. 

Whatever else Abdul Hamid may have been, he was no 
fool. To assume that this shrewd and unscrupulous auto¬ 
crat walked into a German trap when he granted the Bag¬ 
dad Railway concession is naive and absurd. Abdul 
Hamid was not in the habit of giving things away, if he 
could avoid it, without adequate compensation for himself 
and his empire. As Lord Curzon said, there was no 
axiom dearer to the Sultan’s heart than that charity not 
only begins, but stays, at home. 26 Abdul Hamid knew 
that the granting of railway subsidies would mortgage 
his empire. He knew that mortgages have their disad¬ 
vantages, not the least of which is foreclosure. But 
mortgages also have their advantages. Abdul Hamid 
granted extensive railway concessions, carrying with them 
heavy subsidies, because he hoped the new railways would 
strengthen his authority within the Ottoman Empire and 
improve the political position of Turkey in the Near East. 


24 


THE BAGDAD RAILWAY 


BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 Count L. Ostrorog, The Turkish Problem (Paris, 1915* Eng¬ 
lish translation, London, 1919), Chapter II; Leon Dominian, 
The Frontiers of Language and Nationality in Europe (London, 
1917) ; V. Berard, Le Sultan, I’lslam, et les puissances (Paris, 
1907), pp. 15 et seq.\ E. Fazy, Les Turcs d’aujourd’hui (Paris, 
1898) ; A. Vamberry, Das Turkenvolk (Leipzig, 1885) ; A. Geiger, 
Judaism and Islam (London, 1899). Regarding Arab national¬ 
ism, in particular, cf. N. Azoury, Le reveil de la nation arabe 
(Paris, 1905) ; E. Jung, Les puissances devant la revolte arabe 
(Paris, 1906). A fascinating tale of the Arab separatist move¬ 
ment during the Great War is that of L. Thomas, “Lawrence: 
the Soul of the Arabian Revolution,” in Asia (New York), 
April, May, June, 1920. Cf., also, H. S. Philby, The Heart of 
Arabia (2 volumes, New York, 1923). 

3 There is a wealth of material upon the problems of the Otto¬ 
man Empire during the reign of Abdul Hamid. In particular, 
consult the following: A. Vamberry, La Turquie d’aujourd’hui 
et d’avant quarante ans (Paris, 1898) ; C. Hecquard, La Turquie 
sous Abdul Hamid (Paris, 1901) ; G. Dory, Abdul Hamid Intime 
(Paris, 1901) ; Sir Edwin Pears, The Life of Abdul Hamid 
(London, 1917) ; W. Miller, The Ottoman Empire, 1801-1913 
(Cambridge, 1913), Chapters XVI-XVIII; N. Verney and G. 
Dambmann, Les puissances etrangeres dans le Levant, en Syrie, 
et en Palestine (Paris, 1900) ; Baron von Oppenheim, Von Mit- 
telmeer zum persischen Golfe (2 volumes, Berlin, 1899-1900) ; 
Lavisse and Rambaud, Histoire Generate (12 volumes, 1894- 
1901), Volume XI, Chapter XV; Volume XII, Chapter XIV; 
R. Davey, The Sultan and His Subjects (London, 1897) ; V. Car- 
dashian, The Ottoman Empire of the Twentieth Century (Al¬ 
bany, N. Y., 1908). 

* The texts of the various treaties of capitulation may be found 
in G. E. Noradounghian (ed.), Recueil d’actes internationaux de 
VEmpire ottoman, 1300-1902 (4 volumes, Paris, 1897-1903), Vol¬ 
ume I, documents numbers 153, 170, 196, 201, etc., ad lib., Volume 
II, numbers 499, 593, etc., ad lib.; also Recueil des traites de la 
Porte ottomane avec les puissances etrangeres, 1536-1901 (10 
volumes,. Paris, 1864-1901), passim; E. A. Van Dyck, Report on 
the Capitulations of the Ottoman Empire, Forty-seventh Con¬ 
gress, Special Session, Senate Executive Document No. 3, First 
Session, Senate Executive Document No. 87 (Washington, 1881- 
1882) ; G. Pelissie du Rausas, Le regime des capitulations dans 
tEmpire ottoman (2 volumes, Paris, 1902-1905) ; A. R. von 
Overbeck, Die Kapitulationen des osmanischen Reiches (Breslau, 
1917) ; W. Lehman, Die Kapitulationen (Weimar, 1917) ; P. M. 


TURKEY INVITES ECONOMIC EXPLOITATION 25 


Brown, Foreigners in Turkey, Their Juridical Status (Princeton, 

1914). 

4 For an account of the establishment, functions, and operation 
of the Ottoman Public Debt Administration, cf. George Young 
(ed.), Corps de droit ottoman—Recueil des codes, lois, regie- 
ments, ordonnances, et actes les plus importants du droit in - 
terieur, et d’etudes sur le droit coutumier de VEmpire ottoman 
(7 volumes, Oxford, 1905-1906), Volume V, Chapter LXXXV; 
A. Heidborn, Manuel de droit public et administrate de VEmpire 
ottoman (2 volumes, Vienna, 1912), Volume II; C. Morawitz, 
Les finances de Turquie (Paris, 1902) ; A. du Velay, Essai sur 
Vhistoire financiere de la Turquie (Paris, 1903), Parts V and 
VI; L. Delaygue, Essai sur les finances ottomanes (Paris, 1911). 

6 There were a few factories erected in Turkey by foreign cap¬ 
italists, notably those of the Oriental Carpet Manufacturers, Ltd., 
the American Tobacco Company, and the Deutsche-Levantischen 
Baumwollgesellschaft. In general, however, the factory and the 
factory town were not common phenomena in Asiatic Turkey. 
An interesting account of the effects of the Industrial Revolu¬ 
tion upon economic conditions in Turkey is that of Talcott 
Williams, Turkey a World Problem of Today (Garden City, 
1921), pp. 268 et seq.; W. S. Monroe, Turkey and the Turks: an 
Account of the Lands, Peoples and Institutions of the Ottoman 
Empire (London, 1909), Chapter X; M. J. Garnett, Turkish Life 
in Town and Country (London, 1904). 

a J. E. Spurr (ed.), Political and Commercial Geology (New 
York, 1921), pp. 109, 115-116, 172-173, 184-185; Anatolia, No. 17 
in a series of handbooks published by the Historical Section of 
the Foreign Office (London, 1920), pp. 88-90. 

T Spurr, op. cit., pp. 358-359; Armenia and Kurdistan, No. 62 
of the Foreign Office Handbooks, p. 60; L. Dominian, “The 
Mineral Wealth of Asia Minor,” in The Near East, May 26, 
1916, p. 91; E. Banse, Auf den Spuren der Bagdadbahn (Weimar, 
1913), PP- 140-145; L. de Launay, La Geologie et les richesses 
minerales de VAsie (Paris, 1911) ; R. Fitzner, Anatolien, Wirt- 
schaftsgeographie (Berlin, 1902) ; P. Rohrbach, Die wirtschaft- 
liche Bedcutung Westasiens (Halle, 1902) ; G. Carles, La Turquie 
economique (Paris, 1906) ; E. Mygind, “Anatolien und seine 
wirtschaftliche Bedeutung,” in Die Balkan Revue, Volume 4 
(1917), PP- 1-6. 

8 L. Dominian, “Fuel in Turkey: an Analysis of Coal Deposits,” 
in The Near East, June 23, 1916, pp. 186-187; J. Kirsopp, “The 
Coal Resources of the Near East,” ibid., October 10, 1919, pp. 

393-394. 

8 F. Maunsell, “The Mesopotamian Petroleum Field,” in the 
Geographical Journal, Volume IX (1897), PP- 523-532; L. Domi- 


26 


THE BAGDAD RAILWAY 


nian, “Fuel in Turkey: Petroleum,” in The Near East, July 14, 
1917; Mesopotamia, No. 63 of the Foreign Office Handbooks, 
pp. 34, 85-86; Syria and Palestine, No. 60 of the Foreign Office 
Handbooks, p. in. 0 

10 Parliamentary Papers, 1921, Cmd. 675; The Near East, Octo¬ 
ber 26, 1917, p. 516. 

11 Die Bagdadbahn (1903), pp. 26-28. 

13 Parliamentary Papers, 1921, Cmd. 675* For some reason or 
other this option was allowed to lapse. 

“ H. Woodhouse, “American Oil Claims in Turkey,” in Current 
History (New York), Volume XV (1922), pp. 953 - 959 - 

14 Report of the Department of Agriculture in Mesopotamia, 
1920 (Bagdad, 1921) ; The Cultivation of Cotton in Mesopotamia 
(Bagdad, 1922) ; “Cotton Growing in Mesopotamia,” in the 
Bulletin of the Imperial Institute, Volume 18 (1920), pp. 73-82. 

15 Rohrbach, op. cit., pp. 30-46. 

^Quoted in The Near East, October 6, 1916, pp. 545-546. For 
an elaboration of the views of Sir William Willcocks see the 
following of his books and articles: The Recreation of Chaldea 
(Cairo, 1903) ; The Irrigation of Mesopotamia (London, 1905, 
and Constantinople, 1911) ; “Mesopotamia, Past, Present and 
Future,” in the Geographical Journal, January, 1910, pp. 1-18. 
For further works on the economic resources of Turkey-in-Asia 
consult, also, the following: K. H. Muller, Die ivirtschaftliche 
Bedeutung der Bagdadbahn (Hamburg, 1917) ; L. Blanckenhorn, 
Syrien und die deutsche Arbeit (Weimar, 1916) ; L. Schulmann, 
Zur tiirkischen Agrarfrage (Weimar, 1916) ; A. Ruppin, Syrien 
als Wirtschaftsgebiet (Berlin, 1917). 

17 W. von Pressel, Les chemins de fer en Turquie cfAsie 
(Zurich, 1902), pp. 4-5, 52-59, etc. ad lib. For statements of the 
importance of von Pressel in the development of railways in 
Turkey cf. Andre Cheradame, La question d’Orient: la Mace¬ 
doine, le chemin de fer de Bagdad (Paris, 1903), pp. 25 et seq.; 
C. A. Schaefer, Die Entwicklung der Bagdadbahnpolitik 
(Weimar, 1916), p. 13. 

1S Corps de droit ottoman, Volume IV, pp. 62-64. 

19 Sir H. P. Caillard, Article “Turkey” in the Encyclopedia 
Britannica, eleventh edition, Volume 27, p. 439; Reports of the 
Ottoman Public Debt (London, 1884 et seq.), passim. 

30 In Turkey all Mussulmans over 20 years of age were liable 
to military service for a period of 20 years, 4 of which were 
with the colors in the regular army. Residents in the outlying 
territories, notably the Arabs and the Kurds, constantly avoided 
military service and went unpunished because of the inability 
of the Government to send punitive expeditions into these 
regions. Railways would have produced satisfactory bases of 


TURKEY INVITES ECONOMIC EXPLOITATION 27 


operations for such expeditions and would have shortened their 
lines of communication. The Statesmans Year Book, 1903, pp. 
1168-1170. 

11 The Hedjaz Railway was a great national enterprise which 
indicated the strength of Moslem feeling in Turkey and which 
proved the desire of the Ottoman Government to construct 
national railways as far as capital and technical skill could be 
obtained. So far as Abdul Hamid was concerned, the railway 
was an attempt to gain prestige for his claim to the Caliphate, 
as well as a move to strengthen his political position in Syria 
and the Hedjaz. In April, 1900, the Sultan announced to the 
Faithful his determination to construct a railway from Damascus 
to the holy cities of Medina and Mecca. An appeal was issued 
to Mohammedans the world over for funds to carry out the 
work. The Sultan headed the list with a subscription of about 
a quarter of a million dollars, and by 1904 over three and a half 
million dollars had been collected. The only compulsory con¬ 
tributions were the levies of 10% on the salary of every official 
in the civil and military service of the empire. It is estimated 
that the contributions eventually amounted to almost fifteen 
million dollars. The engineers in charge of the construction 
were Italians, although the great bulk of the work was done by 
the army and the peasantry. Nearly seven hundred thousand 
persons were employed on the construction work at one time or 
another, the non-Moslems being replaced as quickly as Mussul¬ 
mans could be trained to take their places. On August 31, 1908, 
the thirty-second anniversary of the accession of Abdul Hamid, 
the railway was completed to Medina, where construction was 
halted temporarily because of the Young Turk Revolution and 
the international complications which followed it. Corps de 
droit ottoman, Volume IV, pp. 242-244; A. Hamilton, Problems 
of the Middle East (London, 1909), pp. 273-292; Annual Register, 
1908, pp. 328-329. 

“Quoted by Hamilton, op. cit., pp. 274-275. 

“ Via the Bagdad Railway and the Syrian, system. Turkish 
troops could have been transported to a point less than 200 miles 
from Suez. A successful attack on the Canal, of course, would 
have severed British communications with the East. In addi¬ 
tion, it would have given the Sultan an opportunity to attack, 
and assert his suzerainty over, Egypt. Dr. Rohrbach made a 
great point of this alleged menace to the British position in 
Egypt. Cf. Die Bagdadbahn, pp. 18-19; German World Policies, 
pp. 165-167. This program, however, would have been an alto¬ 
gether too ambitious one for the military strength of the Otto¬ 
man-Empire, which had such far-flung frontiers to defend. In 
any event, British statesmen seemed to realize that the Sinai 


28 


THE BAGDAD RAILWAY 


Peninsula was a formidable natural defence against an attack 
on the Suez Canal and that such an expedition would be merely 
a pin-prick in the imperial flesh. Parliamentary Debates, House 
of Lords, fifth series, Volume J (1911), pp. 601 et seq. The 
termination in a fiasco of the Turkish drive of 1914-1915 against 
the Canal confirmed this prophecy. 

34 Infra, p. 83; Kurt Wiedenfeld, Die deutsch-tiirkische Wirt- 
schaftsbeziehungen (Leipzig, 1915), p. 23; Report of the Bagdad 
Railway Company, 1908, pp. 4-5. 

36 Cf., e.g., K. Helfferich, Die deutsche Turkenpolitik, p. 22. 

36 Persia and the Persian Question, Volume I, p. 634. 


I 


CHAPTER III 

GERMANS BECOME INTERESTED IN THE 

NEAR EAST 

The First Rails Are Laid 

During the summer of 1888 the Oriental Railways— 
from the Austrian frontier, across the Balkan Peninsula 
via Belgrade, Nish, Sofia, and Adrianople, to Constanti¬ 
nople—were opened to traffic. Connections with the rail¬ 
ways of Austria-Hungary and other European countries 
placed the Ottoman capital in direct communication with 
Vienna, Paris, Berlin, and London (via Calais). The 
arrival at the Golden Horn, August 12, 1888, of the first 
through express from Paris and Vienna was made the 
occasion of great rejoicing in Constantinople and was 
generally hailed by the European press as marking the 
beginning of a new era in the history of the Ottoman Em¬ 
pire. To thoughtful Turks, however, it was apparent that 
the opening of satisfactory rail communications in Eu¬ 
ropean Turkey but emphasized the inadequacy of such 
communications in the Asiatic provinces. Anatolia, the 
homeland of the Turks, possessed only a few hundred 
kilometres of railways; the vast areas of Syria, Meso¬ 
potamia, and the Hedjaz possessed none at all. Almost 
immediately after the completion of the Oriental Rail¬ 
ways, therefore, the Sultan, with the advice and assistance 
of the Ottoman Public Debt Administration, launched a 
program for the construction of an elaborate system of 
railway lines in Asiatic Turkey. 1 

The existing railways in Asia Minor were owned, in 

29 


30 


THE BAGDAD RAILWAY 


1888, entirely by French and British financiers, with 
British capital decidedly in the predominance. The oldest 
and most important railway in Anatolia, the Smyrna- 
Aidin line—authorized in 1856, opened to traffic in 1866, 
and extended at various times until in 1888 it was 270 kilo¬ 
metres in length—was owned by an English company. 
British capitalists also owned the short, hut valuable, Mer- 
sina-Adana Railway, in Cilicia, and held the lease of the 
Haidar Pasha-Ismid Railway. French interests were in 
control of the Smyrna-Cassaba Railway, which operated 
168 kilometres of rails extending north and east from the 
port of Smyrna. It was not until the autumn of 1888 
Vthat Germans had any interest whatever in the railways 
of Asiatic Turkey. 2 

The first move of the Sultan in his plan to develop 
railway communication in his Asiatic provinces was to 
authorize important extensions to the existing railways of 
Anatolia. The French owners of the Smyrna-Cassaba 
line were granted a concession for a branch from Manissa 
to Soma, a distance of almost 100 kilometres, under sub¬ 
stantial subsidies from the Ottoman Treasury. The 
British-controlled Smyrna-Aidin Railway was authorized 
to build extensions and branches totalling 240 kilometres, 
almost doubling the length of its line. A Franco-Belgian 
syndicate in October, 1888, received permission to con¬ 
struct a steam tramway from Jaffa, a port on the Medi¬ 
terranean, to Jerusalem—an unpretentious line which 
proved to be the first of an important group of Syrian 
railways constructed by French and Belgian promoters. 
Shortly afterward the concession for a railway from 
Beirut to Damascus was awarded to French interests. 3 

But the great dream of Abdul Hamid was the great 
dream of Wilhelm von Pressel: the vision of a trunk line 
from the Bosporus to the Persian Gulf, which, in connec¬ 
tion with the existing railways of Anatolia and the new 


GERMANS INTERESTED IN THE NEAR EAST 31 

railways of Syria, would link Constantinople with Smyrna, 
Aleppo, Damascus, Beirut, Mosul, and Bagdad. As early 
as 1886 the Ottoman Ministry of Public Works had sug¬ 
gested to the lessees of the Haidar Pasha-Ismid Railway 
that they undertake the extension of that line to Angora, 
with a view to an eventual extension to Bagdad. The pro¬ 
posal was renewed in 1888, with the understanding that 
the Sultan was prepared to pay a substantial subsidy to 
assure adequate returns on the capital to be invested. The 
lessees of the Haidar Pasha-Ismid line, however, were un¬ 
able to interest investors in the enterprise and were com¬ 
pelled to withdraw altogether from railway projects in 
Turkey-in-Asia. Thereupon Sir Vincent Caillard, Chair¬ 
man of the Ottoman Public Debt Administration, en¬ 
deavored to form an Anglo-American syndicate to under¬ 
take the construction of a Constantinople-Bagdad rail¬ 
way, but he met with no success. 4 

The opportunity which British capitalists neglected Ger¬ 
man financiers seized. Dr. Alfred von Kaulla, of the 
Wiirttembergische Vereinsbank of Stuttgart, who was in 
Constantinople selling Mauser rifles to the Ottoman 
Minister of War, became interested in the possibilities 
of railway development in Turkey. With the cooperation 
of Dr. George von Siemens, Managing Director of the 
Deutsche Bank , a German syndicate was formed to take 
over the existing railway from Haidar Pasha to Ismid 
and to construct an extension thereof to Angora. On 
October 6, 1888, this syndicate was awarded a concession 
for the railway to Angora and was given to understand 
that it was the intention of the Ottoman Government to 
extend that railway to Bagdad via Samsun, Sivas, and 
Diarbekr. The Sultan guaranteed the Angora line a mini¬ 
mum annual revenue of 15,000 francs per kilometre, for 
the payment of which he assigned to the Ottoman Public 
Debt Administration the taxes of certain districts through 


32 


THE BAGDAD RAILWAY 


which the railway was to pass. Thus came into existence 
the Anatolian Railway Company (La Societe du Chemin 
de Fer Ottomane d’Anatolie) , the first of the German 
railway enterprises in Turkey. 5 

The German concessionaires were not slow to realize 
the possibilities of their concession. They elected Sir 
Vincent Caillard to the board of directors of their Com¬ 
pany, in order that they might receive the enthusiastic 
cooperation of the Ottoman Public Debt Administration 
and in order that they might interest British capitalists 
in their project. With the assistance of Swiss bankers 
they incorporated at Zurich the Bank fiir orientalischen 
Eisenbahnen, which floated in the European securities 
markets the first Anatolian Railways loan of eighty million 
francs—more than one fourth of the loan being under¬ 
written in England. Shortly thereafter this same financial 
group, under the leadership of the Deutsche Bank, ac¬ 
quired a controlling interest in more than 1500 kilometres 
of railways in the Balkan Peninsula, by purchasing the 
holdings of Baron Hirsch in the Oriental Railways Com¬ 
pany. The Bank fiir orientalischen Eisenbahnen became 
a holding company for all of the Deutsche Bank's railway 
enterprises in the Near East. 6 

Under the direction of German engineers, in the mean¬ 
time, construction of the Anatolian Railway proceeded at 
so rapid a rate that the 485 kilometres of rails were laid 
and trains were in operation to Angora by January, 1893. 
About the same time a German engineering commission, 
assisted by two technical experts representing the Otto¬ 
man Ministry of Public Works and by two Turkish army 
officers, submitted a report on their preliminary survey 
of the proposed railway to Bagdad. This was enthusi¬ 
astically received by the Sultan, who reiterated his inten¬ 
tion of constructing a line into Mesopotamia at the earliest 
practicable date. 7 


GERMANS INTERESTED IN THE NEAR EAST 33 

In 1887 there was no German capital represented in the 
railways of Asiatic Turkey. Five years later the Deutsche 
Bank and its collaborators controlled the railways of Tur¬ 
key from the Austro-Hungarian border to Constantinople; 
they had constructed a line from the Asiatic shore of 
the Straits to Angora; they were projecting a railway 
from Angora across the hills of Anatolia into the Meso¬ 
potamian valley. In cooperation with the Austrian and 
German state railways they could establish through 
service from the Baltic to the Bosporus and, by ferry and 
railway, into hitherto inaccessible parts of Asia Minor. 
Almost overnight, as history goes, Turkey had become an 
important sphere of German economic interest. Thus was 
born the idea of a series of German-controlled railways 
from Berlin to Bagdad, from Hamburg to the Persian 
Gulf! 

The Ottoman Government apparently was well pleased 
with the energetic action of the German concessionaires 
in the promotion of their railway enterprises in Turkey. 
In any event, a tangible evidence of appreciation was ex¬ 
tended the Anatolian Railway Company by an imperial 
irade of February 15, 1893, which authorized the con¬ 
struction of a branch line of 444 kilometres from Eski 
Shehr (a town about midway between Ismid and An¬ 
gora) to Konia. The new line, like its predecessor, was 
guaranteed a minimum annual return of 15,000 francs per 
kilometre, payments to be made under the supervision 
of the Ottoman Public Debt Administration. The obvious 
advantages of developing the potentially rich regions of 
southern Anatolia, and of providing improved communica¬ 
tion between Constantinople and the interior of Asia 
Minor, led the Anatolian Company to hasten construc¬ 
tion, with the result that service to Konia was inaugurated 
in 1896.® 

Simultaneously with the granting of the second Ana- 


34 


THE BAGDAD RAILWAY 


tolian concession the Sultan authorized an important ex¬ 
tension to the French-owned Smyrna-Cassaba Railway. 
The existing line was to be prolonged a distance of 252 
kilometres from Alashehr to Afiun Karahissar, at which 
latter town a junction was to be effected with the Anatolian 
Railway. Another French company was awarded a con¬ 
cession for the construction of the Damascus-Homs- 
Aleppo railway, in Syria, under substantial financial 
guarantees from the Ottoman Treasury. It was said that 
these concessions to French financiers were “compensa¬ 
tory” in character and were granted upon the urgent rep¬ 
resentations of the French ambassador in Constantinople. 9 

Between 1896 and 1899 no further definite steps were 
taken to extend the Anatolian Railway beyond Angora, 
as had been provided by the original concession. In the 
latter year, however, largely because of Russian objections 
to the further development of railways in northern Asia 
Minor, the Sultan took under consideration the advisability 
of projecting and building, instead, a line from Konia to 
Bagdad via Aleppo and Mosul. Early in 1899 a German 
commission left Constantinople to make a thorough survey 
of the economic and strategic possibilities of such a line. 
Included in the commission were Dr. Mackensen, Director 
of the Prussian State Railways; Dr. von Kapp, Surveyor 
for the State Railways of Wiirttemberg; Herr Stemrich, 
the German Consul-General at Constantinople; Major 
Morgen, German military attache; representatives of the 
Ottoman Ministry of Public Works. It was this commis¬ 
sion that finally decided upon the route of the Bagdad 
Railway. 10 

At the close of the nineteenth century, therefore, the 
sceptre of railway power in the Near East was passing 
from the hands of Frenchmen and Englishmen into the 
hands of Germans. In a period of about ten years the 
German-owned Anatolian Railway Company had con- 


GERMANS INTERESTED IN THE NEAR EAST 35 

structed almost one thousand kilometres of railway lines 
in Asia Minor. A German mission was blazing a trail 
through Syria and Mesopotamia for the extension of the 
Anatolian Railway to the valley of the Tigris River and 
the head of the Persian Gulf. German prestige seemed 
to be in the ascendancy: the Directors of the Anatolian 
Company reported to the stockholders in 1897 that, “as 
in former years, our Company has concerned itself con¬ 
tinuously with the development of trade, industry, and 
agriculture in the region served by the Railway. As a 
result our enterprise has enjoyed in every sense the whole¬ 
hearted support and the powerful protection of His 
Majesty the Sultan. Our relationships with the Imperial 
Ottoman Government, the local authorities, and all classes 
of the people themselves are more cordial than ever.” 11 

The system of railways thus founded had been con¬ 
ceived by a German railway genius; it had been con¬ 
structed by German engineers with materials made by Ger¬ 
man workers in German factories; it had been financed by 
German bankers; it was being operated under the super¬ 
vision of German directors. In the minds of nineteenth- 
century neo-mercantilists this was a matter for national 
pride. A Pan-German organ hailed the Anatolian Rail¬ 
ways and the proposed Bagdad enterprise in glowing 
terms: “The idea of this railway was conceived by Ger¬ 
man intelligence; Germans made the preliminary studies; 
Germans overcame all the serious obstacles which stood in 
the way of its execution. We should be all the more 
pleased with this success because the Russians and the 
English busied themselves at the Golden Horn endeavoring 
to block the German project.” 12 

The Traders Follow the Investors 

The construction of the Anatolian Railways by German 
capitalists was accompanied by a considerable expansion of 


36 


THE BAGDAD RAILWAY 


German economic interests in the Near East. In 1889, for 
example, a group of Hamburg entrepreneurs established 
the Deutsche Levante Linie, which inaugurated a direct 
■ steamship service between Hamburg, Bremen, Antwerp, 
and Constantinople. It was the expectation of the owners 
of this line that the construction of the Anatolian railways 
would materially increase the volume of German trade with 
Turkey—an expectation which was justified by subse¬ 
quent developments. In 1888, the year of the original 
railway concession to the Deutsche Bank, exports from 
Germany to Turkey were valued at 11,700,000 marks; 
by 1893, when the line was completed to Angora, they 
mounted to a valuation of 40,900,000 marks, an increase 
of about 350%. Imports into Germany from Turkey 
during the same period rose from 2,300,000 marks to 
16,500,000 marks, showing an increase of over 700%. 
No small proportion of the phenomenal increase in the 
volume of German exports to Turkey can be attributed to 
the use of German materials on the Ismid-Angora rail¬ 
way. In any event, there was no further substantial de¬ 
velopment of this export trade between 1895 and 1900, 
although imports into Germany from Turkey reached 
the high figure of 28,900,000 marks at the close of the 
century. 13 

That German traders should follow German financiers 
into the Ottoman Empire was to be expected. The 
Deutsche Bank —sponsor of the Anatolian Railways—had 
been notably active in the promotion of German foreign 
commerce. From its very inception it had devoted itself 
energetically to the promotion of industrial and commer¬ 
cial activity abroad, thus carrying out the object announced 
in its charter “of fostering and facilitating commercial 
relations between Germany, other European countries, and 
oversea markets.” By the establishment of foreign 
branches, by the liberal financing of import and export 


GERMANS INTERESTED IN THE NEAR EAST 37 


shipments, by the introduction of German bills of exchange 
in the four corners of the earth, and by other similar 
methods, this great bank was largely responsible for the 
emancipation of German traders from their former de-’ 
pendence upon British banking facilities. The Anatolian 
Railways concessions marked the initial efforts of the 
Deutsche Bank at Constantinople. What it had done else¬ 
where it could be expected to do in the interests of German 
business men operating in Turkey. 14 

The London Times of October 28, 1898, contained a 
significant review of the status of German enterprise in 
the Ottoman Empire during the decade immediately pre¬ 
ceding. Whereas ten years before, the finance and trade 
of Turkey were practically monopolized by France and 
Great Britain, the Germans were now by far the most 
active group in Constantinople and in Asia Minor. Hun¬ 
dreds of German salesmen were traveling in Turkey, 
vigorously pushing their wares and studiously canvassing 
the markets to learn the wants of the people. The Krupp- 
owned Germania Shipbuilding Company was furnishing 
torpedoes to the Turkish navy; Ludwig Loewe and Com¬ 
pany, of Berlin, was equipping the Sultan’s military ma¬ 
chine with small arms; Krupp, of Essen, was sharing with 
Armstrong the orders for artillery. German bicycles were 
replacing American-made machines. There was a notice¬ 
able increase of German trade with Palestine and Syria. 
In 1899 a group of German financiers founded the 
Deutsche Palastina Bank, which proceeded to establish 
branches at Beirut, Damascus, Gaza, Haifa, Jaffa, Jeru¬ 
salem, Nablus, Nazareth, and Tripoli-in-Syria. 

^Promoters, bankers, traders, engineers, munitions manu¬ 
facturers, ship-owners, and railway builders all were play¬ 
ing their parts in laying a substantial foundation for a 
further expansion of German economic interests in the 
Ottoman Empire. 15 


38 


THE BAGDAD RAILWAY 


The German Government Becomes Interested 

In a sense, German diplomacy had paved the way for the 
Anatolian Railway concessions. For numerous reasons, 
which need not be discussed here, French and British in¬ 
fluence at the Sublime Porte gradually declined during 
the decades of 1870-1890. British prestige, in particular, 
waned after the occupation of Egypt in 1882. The Ger¬ 
man ambassador at Constantinople during most of this 
period was Count Hatzfeld, an unusually shrewd diplo¬ 
matist, who perceived the extraordinary opportunity which 
then existed to increase German prestige in the Near East. 
His place in the counsels of the Sultan became increasingly 
important, as he missed no chance to seize privileges sur¬ 
rendered by France or Great Britain. 16 

An instance of Count Hatzfeld’s activity was the ap¬ 
pointment of a German military mission to Turkey. Until 
1870 there had been a French mission in Constantinople, 
with almost complete control over the training and equip¬ 
ment of the Ottoman army. At the outbreak of the Franco- 
German War, however, the mission was recalled because 
of the crying need for French officers at the front. After 
the termination of hostilities, and again after the collapse 
of the Turkish defence against Russia in 1877, the Sultan 
requested the reappointment of the mission, but the French 
Government politely declined the invitation. The German 
ambassador seized upon this neglected opportunity and, 
in 1883, persuaded Abdul Hamid to invite the Kaiser to 
designate a group of German officers to serve with the 
Ottoman General Staff. 17 

In command of the German military mission despatched 
to Turkey in response to this invitation was General von 
der Goltz. This brilliant officer—who, appropriately 
enough, was to die in the Caucasus campaign of 1916— 
remained in Turkey twelve years, reorganizing the Turkish 


GERMANS INTERESTED IN THE NEAR EAST 39 

army, forming a competent general staff, establishing a 
military academy for young officers, and formulating 
plans for an adequate system of reserves. So great was 
his success that he won the lasting respect of Turkish mili¬ 
tary and civil officials; time and time again he was invited 
to return to Turkey as military adviser extraordinary; in 
1909 he answered the call of the Young Turks and lent 
his ripened judgment to the solution of their distracting 
problems; he was granted the coveted title of Pasha. 
The personal prestige of von der Goltz was of no small 
importance in brightening Germany’s rising star in the 
Near East. 18 

Another event of first rate importance in the history of 
German ventures in the Ottoman Empire was the acces¬ 
sion, in 1888, of Emperor William II. During the three 
decades of his reign the economic foundations of German 
imperialism were strengthened and broadened; the super¬ 
structure of German imperialism was both reared and 
destroyed. During his regime the German industrial revo¬ 
lution reached its height, and the empire, it seemed, be¬ 
came one enormous factory consuming great quantities 
of raw materials and producing a prodigious volume of 
manufactured commodities for the home and foreign mar¬ 
kets. Simultaneously there was developed a German mer¬ 
chant marine which carried the imperial flag to the seven 
seas. A normal concomitant of this industrial and com¬ 
mercial progress was the expansion of political and eco¬ 
nomic interests abroad—renewed activity in the acquisition 
of a colonial empire; marked success in the further con¬ 
quest of foreign markets; the creation of a great navy; 
the phenomenal increase of German investments in Turkey. 
It is no insignificant coincidence that German financiers 
received their first Ottoman railway concession in the 
year of the accession of William II and that the capture 
of Aleppo—ending once and for all the plan for a German- 


40 


THE BAGDAD RAILWAY 


controlled railway from Berlin to Bagdad—occurred just 
a few days before his abdication. 

From the first the Kaiser evinced a keen interest in the 
Ottoman Empire as a sphere in which his personal in¬ 
fluence might be exerted on behalf of German economic 
expansion and German political prestige. He was quick 
to recognize the opportunities for German enterprise in 
a country where much went by favor, and where political 
influence could be effectually exerted for the furtherance 
of commercial interests. In one of a round of royal visits 
following his accession, the young Emperor, in November, 
1889, paid his respects to the Sultan Abdul Hamid. Upon 
the arrival in the Bosporus of the imperial yacht Hohen- 
zollern, the Kaiser and Kaiserin received an ostentatious 
welcome from the Sultan and cordial greetings from the 
diplomatic corps. It was suggested at the time that there 
was more than formal significance in this visit of the 
German sovereigns, coming, as it did, when prominent 
German financiers were engaged in constructing the first 
kilometres of an important Anatolian railway. This im¬ 
pression was confirmed when, shortly after the Em¬ 
peror’s return to the Fatherland, a favorable commercial 
treaty was negotiated by the German ambassador at Con¬ 
stantinople and ratified by the German and Ottoman Gov¬ 
ernments in 1890. 19 

The expansion of German economic interests and 
political prestige in the Ottoman Empire was not looked 
upon with favor by Bismarck. The Great Chancellor was 
primarily interested in isolating France on the continent 
and in avoiding commercial and colonial conflicts overseas. 
In particular he had no desire to become involved in the 
complicated Near Eastern question—toward which at 
various times he had expressed total indifference and con¬ 
tempt—for fear of a clash with Russian ambitions at Con¬ 
stantinople. He realized that German investments in 


GERMANS INTERESTED IN THE NEAR EAST 41 


Turkey might lead to pressure on the German Govern¬ 
ment to adopt an imperial policy in Asia Minor, as, indeed, 
German investments in Africa had forced him to enter 
colonial competition in the Dark Continent. 20 When the 
Deutsche Bank first called the Chancellor’s attention to its 
Anatolian enterprises, therefore, Bismarck frankly stated 
his misgivings about the situation. In a letter to Dr. von 
Siemens, Managing Director of the Deutsche Bank, dated 
at the Foreign Office, September 2, 1888, he wrote: 21 

“With reference to the inquiry of the Deutsche Bank of 
the 15 ultimo, I beg to reply that no diplomatic objections 
exist to an application for a concession for railway construc- 
. tion in Asia Minor. 

The Imperial Embassy at Constantinople has been author¬ 
ized to lend support to German applicants for such conces¬ 
sions —particularly to the designated representative of the 
Deutsche Bank in Constantinople—in their respective endeav¬ 
ors in this matter. 

The Board of Directors in its inquiry has correctly given 
expression to the assumption that any official endorsement 
of its plans, in the present state of affairs, would neither 
extend beyond the life of the concession nor apply to the 
execution and operation of the enterprise. As a matter of 
fact, German entrepreneurs assume a risk in capital invest¬ 
ments in railway construction in Anatolia—a risk which lies, 
first, in the difficulties encountered in the enforcement of 
the law in the East, and, second, in the increase of such 
difficulties through war or other complications. 

The danger involved therein for German entrepreneurs 
must he assumed exclusively by the entrepreneurs, and the 
latter must not count upon the protection of the German 
Empire against eventualities connected with precarious enter¬ 
prises in foreign countries.” 23 

Bismarck disapproved of the visit of William II to Tur¬ 
key in 1889. Failing to persuade the young Emperor to 
abandon the trip to Constantinople, the Chancellor did 


42 


THE BAGDAD RAILWAY 


what he could to allay Russian suspicions of the purposes 
of the journey. Describing an interview which he had 
with the Tsar, in October, 1889, Bismarck wrote, in a 
memorandum recently taken from the files of the Foreign 
Office: “As to the approaching journey of the Kaiser to 
the Orient, I said that the reason for the visit to Con¬ 
stantinople lay only in the wish of our Majesties not to 
come home from Athens without having seen Constanti¬ 
nople; Germany had no political interests in the Black 
Sea and the Mediterranean; and it was accordingly im¬ 
possible that the visit of our Majesties should take on a 
political complexion. The admission of Turkey into the 
Triple Alliance was not possible for us; we could not lay 
on the German people the obligation to fight Russia for 
the future of Bagdad.” 23 In 1890, however, Prince Bis¬ 
marck was dismissed, and the chief obstacle to the Em¬ 
peror’s Turkish policy was removed. 

During the succeeding decade the German diplomatic 
and consular representatives in the Ottoman Empire ren¬ 
dered yeoman service in furthering investment, trade, and 
commerce by Germans in the Near East. It became pro¬ 
verbial among foreign business men in Turkey that no 
service was too menial, no request too exacting, to receive 
the courteous and efficient attention of the German gov¬ 
ernmental services. German consular officers were held 
up as models for others to pattern themselves after. The 
British Consul General at Constantinople, for example, 
informed British business men that his staff was at their 
disposal for any service designed to expedite British trade 
and investments in Turkey. “If,” he wrote, “any merchant 
should come to this consulate and say, ‘The German consu¬ 
late gives such and such assistance to German traders, do 
the same for me/ his suggestion would be welcomed and, 
if possible, acted on at once.” 24 

A judicious appointment served to reinforce the already 


GERMANS INTERESTED IN THE NEAR EAST 43 

strong position of the Germans in Turkey. In 1897 Baron 
von Wangenheim was replaced as ambassador to Con¬ 
stantinople by Baron Marschall von Bieberstein (1842— 
1912), a former Secretary of State for Foreign Affairs. 
Baron Marschall was one of the most capable of German 
bureaucrats. The Kaiser was glad to have him at Con¬ 
stantinople because his training and experience made him 
an admirable person for developing imperial interests 
there; his political opponents considered his appointment 
to the Sublime Porte a convenient method of removing 
him from domestic politics. The new ambassador’s po¬ 
litical views were well known: he was a frank believer in a 
world-policy for Germany; he was an ardent supporter of 
colonialism, if not of Pan-Germanism; he was a bitter 
opponent of Great Britain; he espoused the cause of a 
strong political and economic alliance between the German 
and Ottoman Empires. What Baron Marschall did he 
did well. Occupying what appeared, at first, to be an 
obscure post, he became the foremost of the Kaiser’s 
diplomatists and for fifteen years lent his powerful per¬ 
sonality and his practical experience to the furthering of 
German enterprise in Turkey. 25 

In 1898 William II made his second pilgrimage to the 
Land of Promise. Every detail of this trip was arranged 
with an eye to the theatrical: the enthusiastic reception at 
Constantinople; the “personally conducted” Cook’s tour 
to the Holy Land; the triumphal entry into the Holy City 
through a breach in the walls made by the infidel Turk; 
the dedication of a Lutheran Church at Jerusalem; the 
hoisting of the imperial standard on Mount Zion; the gift 
of hallowed land to the Roman Catholic Church; the visit 
to the grave of Saladin at Damascus and the speech by 
which the Mohammedans of the world were assured of 
the eternal friendship of the German Emperor. 26 The 
dramatic aspects of the royal visit were not sufficient, 


44 


THE BAGDAD RAILWAY 


however, to obscure its practical purpose. It was generally 
supposed in western Europe that the Kaiser’s trip to 
Turkey was closely connected with the application of the 
Anatolian Railways for the proposed Bagdad Railway 
concessions. 27 But little objection was raised by the British 
and French press. Paris laughed at the obvious absurdity 
of a Cook’s tour for a crowned head and his entourage; 
London took comfort in the discomfiture which the inci¬ 
dent would cause Russia. But there was no talk then of 
a great Teutonic conspiracy to spread a “net” from Ham¬ 
burg to the Persian Gulf. 28 

The true significance of this royal pilgrimage of 1898 
cannot be appreciated without some reference to its back¬ 
ground of contemporary events. For the preceding four 
years the Ottoman Government had permitted, if not 
actually incited, a series of ruthless massacres of Christians 
in Macedonia and Armenia. European public opinion was 
unanimous in condemnation of the intolerance, brutality, 
and corruption of Abdul Hamid’s regime; the very name 
of the “Red Sultan” was anathema. Under these circum¬ 
stances any demonstration of friendship and respect for 
the Turkish sovereign would be considered flagrant flaunt¬ 
ing of public morality. 29 By Abdul Hamid, on the other 
♦hand, it would be welcomed as needed support in time of 
trouble. With the Kaiser the exigencies of practical 
politics triumphed! 

It was appropriate, furthermore, that the year 1898 
should be marked by some definite step forward in Ger¬ 
man imperialist progress in Turkey, for during that year 
notable advances had been made by German imperialism 
in other fields. On March 5 there was forcibly wrung 
from China a century-long lease of Kiao-chau and of 
certain privileges in the Shantung Peninsula, thus assur¬ 
ing to German enterprise a prominent position in the Far 
East. Two weeks later was passed the great German 


GERMANS INTERESTED IN THE NEAR EAST 45 

naval law of 1898, laying the foundation of a fleet that 
later was to challenge British supremacy of the seas. 
German diplomacy had developed interests in eastern 
Asia; it was developing interests on the seas and in west¬ 
ern Asia; it had abandoned a purely Continental policy. 
No further signs were needed that a new era was dawning 
in German foreign affairs—unless, perhaps, it be men¬ 
tioned that the great Prince Bismarck quietly passed away 
at Friedrichsruh on July 30 of that momentous year! 

German Economic Interests Make for Near 
Eastern Imperialism 

Bismarck’s policy of aloofness in the Near East, how¬ 
ever desirable it may have been from the political point 
of view, could not have appealed to those statesmen and 
soldiers and business men who believed that diplomatic 
policies should be determined in large part by the economic 
situation of the German Empire. The interest of William 
II in Turkey was enthusiastically supported by all those 
who sought to have German foreign affairs conducted 
with full recognition of the needs of industrialized Ger¬ 
many in raw materials and foodstuffs, of the importance 
of richer and more numerous foreign markets for the 
products of German factories, and of the exigencies of 
economic, as well as military, preparation for war. The 
great natural wealth of the Ottoman Empire in valuable 
raw materials, the possibilities of developing the Near East 
as a market for manufactured articles, and the geograph¬ 
ical situation of Turkey all help to explain why the eco¬ 
nomic exploitation of the Sultan’s dominions was a matter 
of more vital concern to Germany than to any other 
European power. To make this clear it will be necessary 
to digress, for a time, to consider the nature of the im¬ 
perial problems of an industrial state and, in particular, 
the problems of industrial Germany. 


4 6 


THE BAGDAD RAILWAY 


Under modern conditions the needs of an industrial 
state are imperious. Such a state is dependent for its very 
existence upon an uninterrupted supply of foodstuffs for 
the workers of its cities and of raw materials for the 
machines of its factories. As its population increases— 
unless it be one of those few fortunate nations which, like 
the United States, are practically self-sufficient—its im¬ 
portations of foodstuffs mount higher and higher. As its 
industries expand, the demand for raw materials becomes 
greater and more diversified—cotton, rubber, copper, 
nitrates, petroleum come to be considered the very life¬ 
blood of the nation’s industry. It is considered one of 
the functions of the government of an industrial state— 
whether that government be autocratic and dynastic or 
representative and democratic—to interest itself in secur¬ 
ing and conserving sources of these essential commodities, 
as well as to defend and maintain the routes of communi¬ 
cation by which they are transported to the domestic 
market. The securing of sources of raw materials may in¬ 
volve the acquisition of a colonial empire; it may require 
the establishment of a protectorate over, or a “sphere of 
interest” in, an economically backward or a politically 
weak nation; or it may necessitate nothing more than the 
maintenance of friendly relations with other states. Pro¬ 
tection of vital routes of communication may demand the 
construction of a fleet of battleships; it may be the raison 
d’etre for a large standing army; it may necessitate only 
diplomatic support of capitalists in their foreign invest¬ 
ments. Methods will be dictated by circumstances, but the 
impulse usually is the same. 30 

The German Empire was an industrial state, and its 
needs were imperious. In the face of a rapidly increasing 
population the nation became more and more dependent 
upon importations of foreign foodstuffs. Herculean efforts 
were made to keep agricultural production abreast of the 


GERMANS INTERESTED IN THE NEAR EAST 47 


domestic demand for grain: transient laborers were im¬ 
ported from Russia and Italy to replace those German 
peasants who had migrated to the industrial cities; ma¬ 
chinery was introduced and scientific methods were ap¬ 
plied ; high protective tariffs were imposed upon imported 
foodstuffs to stimulate production within the empire. 
These measures, however, were insufficient to meet the 
situation; the greatest intensive development of the agri¬ 
cultural resources of the nation could not forestall the 
necessity of feeding some ten millions of Germans on 
foreign grain. 31 

German manufacturers, as well, were unable to obtain 
from domestic sources the necessary raw materials for 
their industrial plants. Many essential commodities were 
not produced at all in Germany and in only insignificant 
quantities in the colonies. Some German industries were 
almost wholly dependent upon foreign sources of supply 
for their raw materials. The most striking example of 
this was the textile manufactures, which had to obtain 
from abroad more than nine tenths of their raw cotton, 
jute, silk, and similar essential supplies. 32 Interruption 
of the flow of these or other indispensable goods would 
have brought upon German industrial centers the same 
paralysis which afflicted the British cotton manufactures 
during the American Civil War. 

The German Empire had to pay for its imported food¬ 
stuffs and raw materials with the products of its mines 
and factories, with the services of its citizens and its ships, 
with the use of its surplus funds, or capital. 33 The de¬ 
velopment of a German export trade was the natural out¬ 
come of the development of German industry. And as 
German industries expanded, the demand for imported 
raw materials increased, thus rendering more necessary 
the extension of the export trade. The German industrial 
revolution of the late nineteenth century was at once the 


48 


THE BAGDAD RAILWAY 


cause and the effect of the growing dependence of German 
economic prosperity upon foreign markets. 34 

But foreign commerce is not concerned with the sale of 
manufactured articles only. In its export trade, German 
industry was closely allied with German shipping and 
German finance. The services rendered German trade by 
the German merchant marine need not be reiterated; they 
are sufficiently well known. The relationship between the 
policies of German industry and the policies of German 
finance was no less important. The export of goods by 
German factories was supplemented by the so-called “ex¬ 
port of capital” by German banks. Sometimes the Ger¬ 
man trader followed the German investor; sometimes the 
investor followed the trader. But whichever the order, 
the services rendered by the investor were to develop the 
purchasing power and the prosperity of the market, as 
well as to oil the mechanism of international exchange. 35 
The industrial export policy and the financial export policy 
went hand in hand. Certainly this was the case in the 
Near East. 

The German Empire depended for its welfare, if not 
for its existence, upon an uninterrupted supply of food for 
its workers and of raw materials for its machines. But 
this supply, in turn, was conditional upon the maintenance 
and development of a thriving export trade. The allies 
of this export trade were a great merchant marine and a 
vigorous policy of international finance and investment. 
Thus the nation which in 1871 was economically almost 
self-sufficient, by 1900 had extended its interests to the 
four corners of the earth. This could not have been with¬ 
out its effects upon German international policy. “The 
strength of the nation,” said Prince von Biilow, “re¬ 
juvenated by the political reorganization, as it grew, burst 
the bounds of its old home, and its policy was dictated by 
new interests and needs. In proportion as our national 


GERMANS INTERESTED IN THE NEAR EAST 


49 


life has become international, the policy of the German 
Empire has become international. . . . Industry, com¬ 
merce, and the shipping trade have transformed the old 
industrial life of Germany into one of international in¬ 
dustry, and this has also carried the Empire in political 
matters beyond the limits which Prince Bismarck set to 
German statecraft.” 36 

From the German point of view, the call to German 
imperialism was clearly urgent, but the resources of Ger¬ 
man imperialism were seriously limited. The colonial ven¬ 
tures of the Empire had culminated in no outstanding suc¬ 
cesses and in some outstanding failures. Entering the 
lists late, the Germans had found the spoils of colonial 
rivalry almost completely appropriated by those other 
knights errant of white civilization, French, British, and 
Russian empire-builders. The few African and Asiatic 
territories which the Germans did succeed in acquiring 
were extensive in size, but unpromising in many other 
respects. With the exception of German East Africa the 
colonies were comparatively poor in the valuable raw ma¬ 
terials so much desired by the factories of the mother 
country; they were unimportant as producers of food¬ 
stuffs. Attempts to induce Germans to settle in these 
overseas possessions were singularly unsuccessful. On 
the other hand, colonial enterprises had involved the em¬ 
pire in enormous expenditures aggregating over a billion 
marks; had precipitated a series of wars and military ex¬ 
peditions costing the nation thousands of lives and creat¬ 
ing a host of international misunderstandings; had won 
for Germans widespread notoriety as poor colonizers, as 
tactless and autocratic officials, as ruthless overlords of 
the natives. It was no wonder that the German people 
seemed to be thoroughly discouraged and discontented 
with their colonial ventures. 

However, even had the German colonies been richer 


50 


THE BAGDAD RAILWAY 


than they were, they, alone, could not have solved the 
imperial problem of an industrialized Germany. German 
colonial trade was possessed of the same inherent weakness 
as German overseas commerce—it would be dependent, in 
the event of a general European war, upon British sea 
power. German industry could be effectually crippled 
by interruption of the flow of essential raw materials, such 
as cotton and copper, or by the cutting of communications 
with her foreign markets. It was questionable whether 
the German navy could be relied upon to keep the seas 
open. 

Blockades, furthermore, exist not only in time of war, 
but in time of peace as well. European nations were 
surrounded by tariff barriers which seriously restricted 
the development of international trade and served to pro¬ 
mote a system of national economic exclusiveness—a con¬ 
dition of affairs which harmonized only too well with the 
existing colossal military establishments. In this respect, 
of course, Germany was more sinner than sinned against. 
But in such an age it behooved every nation to build its 
industries, as well as its armies, with some view to the 
contingencies of war. 

German statesmen and economists were by no means 
backward in understanding the situation. Although they 
had no disposition to overlook the development of the 
merchant marine and the navy, they believed this was 
not enough. They sought to build up in Central Europe 
a system of economic alliances, as they previously had 
effected a formidable military alliance. Thus might Ger¬ 
many and her allies become an economically self-sufficient 
unit, freed from dependence upon British sea power. 37 
And into this alliance could be incorporated the Near 
East! 

Beyond the Bosporus lay a country rich in oils and 
metals; a country capable of supplying German textile 


GERMANS INTERESTED IN THE NEAR EAST 51 

mills with cotton of superior quality; a country which in 
ancient times was fabulously wealthy in agricultural prod¬ 
ucts; a country which gave promise of developing into 
a rich market for western commodities. Communication 
with this wonderland was to be established by a German- 
controlled railway upon which service could be maintained 
in time of war, as in time of peace, without the aid of 
naval power. What greater inducements could have been 
offered to German imperialists, living in an imperialist 
world? Turkey was destined to fall within the economic 
orbit of an industrialized Germany! 

A distinguished German publicist said in 1903, “From 
the German point of view, it would be unparalleled stu¬ 
pidity if we did not most energetically do our part to ac¬ 
quire a share in the revival of the ancient civilization of 
Mesopotamia, Syria, and Babylonia. What we do not do 
others will surely do—be they British, French, or Russian; 
and the increased economic advantage which, through the 
Bagdad Railway, will accrue to us in the Nearer East 
would otherwise not only fail to be ours, but would serve 
to strengthen our rivals in diplomacy and business.” 88 
Some years later, in the midst of the Great War, an Amer¬ 
ican writer expressed much the same point of view: 
“Hemmed in on the west by Great Britain and France 
and on the east by Russia, born too late to extend their 
political sovereignty over vast colonial domains, and unable 
(if only for lack of coaling stations) to develop sea power 
greater than that of their rivals, nothing was more natural 
than the German and Austro-Hungarian conception of a 
Drang nach Osten through the Balkan Peninsula, over the 
bridge of Constantinople, into the markets of Asia. The 
geographical position of the Central European states made 
as inevitable a penetration policy into the Balkans and 
Turkey as the geographical position of England made 
inevitable the development of an overseas empire.” 39 Karl 


52 


THE BAGDAD RAILWAY 


Helfferich has said that “it was neither accident nor de¬ 
liberate purpose, as much as it was the course of German 
economic development, which led Germany to take an 
active interest in Turkey.” 40 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 The Annual Register, 1888, pp. 44, 310. 

3 Good general statements of the transportation problem of 
Turkey during the two decades 1880-1900 are Verney and Damb- 
mann, op. cit., Part III; J. Courau, La locomotive en Turquie 
d’Asie (Brussels, 1895), pp. 18-47; Corps de droit ottoman, 
Volume IV, pp. 117 et seq. 

* Corps de droit ottoman, Volume IV, pp. 202-223, 237-242, etc. 

4 Bulletin de la Chambre de Commerce franqaise de Constan¬ 
tinople, August 31, 1888, p. 10; September 30, 1888, p. 31. Cf., 
also a prospectus issued by a banker, Mr. W. J. Alt, “Heads of 
a Convention for the extension of the Haidar Pasha-Ismid 
Railway” (London, 1886), a copy of which was loaned to the 
author by Mr. Ernest Rechnitzer. 

‘ The story of these negotiations is well told in a new book 
by Dr. Karl Helfferich, Georg von Siemens—ein Lebensbild 
(Leipzig, 1923), the proofs of which I have had the privilege 
of reading. For an official copy of the convention and by-laws 
of the Anatolian Railway Company ( Firman Imperial de con¬ 
cession et statuts de la Societe du Chemin de Fer Ottomane 
d’Anatolie, Constantinople, 1889), I am indebted to Dr. Arthur 
von Gwinner, of the Deutsche Bank. Cf., also, Administration 
de la dette publique ottomane—Rapport sur les operations de 
Vannee 1888 (Constantinople, 1889) ; Report of the Anatolian 
Railway Company, 1889, pp. 1-2; Corps de droit ottoman, Volume 
IV, pp. 120-142. 

•Helfferich, op. cit., Part V; A. P. Briining, Die Entwicklung 
des auslandischen, speciell des uberseeischen deutschen Bank- 
wesens (Berlin, 1907), pp. 14 et seq.; Report of the Anatolian 
Railway Company, 1889, p. 3; Report of the Deutsche Bank, 
1892, p. 4, 1890, p. 4. 

T Report of the Anatolian Railway Company, 1891, p. 20, 1892, 
pp. 16, 23. 

8 Actes de la concession du chemin de fer Eski Shehr-Konia 
(Constantinople, 1893) ; Report of the Anatolian Railway Com¬ 
pany, 1896, pp. 4, 9. 

* Corps de droit ottoman, Volume IV, pp. 191-197. The junc¬ 
tion of the two systems at Afiun Karahissar did not immediately 


GERMANS INTERESTED IN THE NEAR EAST 53 


materialize. The distance from that town to Constantinople is 
longer by sixty-six kilometres than the distance to Smyrna; 
the latter port, therefore, is the better natural outlet for the 
products of Anatolia. This diversion of traffic to Smyrna the 
Anatolia Railway sought to avoid, it is said, by granting dis¬ 
criminatory rates in favor of through freight to Constantinople 
over its own lines. A rate war ensued between the Anatolian 
and Smyrna-Cassaba systems, and neither was willing to permit 
an actual joining of the tracks at Afiun Karahissar, with the 
result that for years the rails of the two roads lay a compara¬ 
tively few yards apart. This absurd situation, so obviously 
detrimental to the interests of the two roads, was remedied by 
an agreement of 1899. Infra, pp. 59-60. Cf., also R. LeCoq, 
Un chemin de fer en Asie Mineure (Paris, 1907), pp. 23-24; 
Report of the Anatolian Railway Company, 1899, p. 3. 

1# A summary of the report of the Commission is to be found 
in Diplomatic and Consular Reports, No. 3140 (London, 1903), 
pp. 26 et seq. A statement of its membership and purposes is 
given in the Report of the Anatolian Railway Company, 1899, 

p. 9. 

11 Report of the Anatolian Railway Company, 1897, p. 3. 

u Alldeutsche Blatter, December 17, 1899. It should be borne 
in mind, however, that until the Bagdad Railway concession was 
granted French financiers held the lead in the number of 
kilometres of railway in operation or contracted for. The situa¬ 
tion in 1898 was as follows: 


British 

Kiloms. 

Smyrna-Aidin... 373 
Mersina-Adana.. 67 


Total.440 


French 

Kiloms. 


Smyrna - Cas- 


saba . 

512 

Jaffa - Jeru- 


salem . 

87 

Beirut - Damas- 


cus . 

247 

Damascus- 


Aleppo . 

420 


German 

Kiloms. 

Haidar Pasha- 

Ismid . 91 

Ismid-Angora. 485 
Eski S h e h r- 
Konia . 444 


Total .1,020 


Total .1,266 


All of the British and German lines were in operation in 1898, 
whereas the French Syrian Railways were only partially com¬ 
pleted. 

u Statistisches Handbuch fur das deutsche Reich, Volume 2, 
pp. 506, 510; Diplomatic and Consular Reports, No. 2950 (1902), 














54 


THE BAGDAD RAILWAY 


pp. 5, 23; Turkey in Europe, No. 16 of the Foreign Office Hand¬ 
books, pp. 86-87. 

14 J. Riesser, Die deutschen Grossbanken und ihre Konzentra - 
tion ini Zusammenhang nvit der Entwicklung der Gesamtunrt - 
schaft in Deutschland (third edition, Jena, 1909) ; translated into 
English and published as Senate Document No. 593, Sixty-first 
Congress, Second Session, 1911. References here given are to 
the translation. In this connection cf. “The Oversea and Foreign 
Business of the German Credit Banks,” pp. 420 et seq. 

15 Syria and Palestine, p. 126; The Times, October 28, 1898, 
August 2 and 16, 1899. 

18 Karl Helfferich, Die deutsche Tiirkenpolitik (Berlin, 1921), 
pp. 10 et seq.; J. A. R. Marriot, The Eastern Question (Oxford, 
1917 ), PP- 347 et seq. 

11 L. Ostrorog, The Turkish Problem (London, 1919), pp. 
52-53; E. Dutemple, En Turquie d’Asie (Paris, 1883), pp. 131 
et seq. 

18 For a biographical account of General von der Goltz (1843- 
1916) cf. F. W. Wile, Men Around the Kaiser (Philadelphia, 
1913). Chapter XXVI. Bismarck consented to the appointment 
of von der Goltz’s military mission—which was not in accord 
with his general Eastern policy—as a sort of insurance against 
the possibility that chauvinism, Pan-Slavism, and anti-German 
elements in Russia should gain the ascendancy at the court of 
the Tsar. In such an event it might be possible to utilize Turk¬ 
ish bayonets and Turkish artillery, especially if they had been 
trained by Prussian officers. Memoirs of Prince Hohenlohe- 
Schillingsfurst (English translation, New York, 1906), Volume 
II, p. 268. 

19 Recueil d'actes internationaux de VEmpire Ottoman, Volume 
IV (1903), Document No. 960. 

20 Mary E. Townsend, Origins of Modern Gernuin Colonialism 
(New York, 1921), Chapters V-VII; Prince Bismarck, Reflec¬ 
tions and Reminiscences (New York, 1899), Volume II, pp. 233 
et seq. 

” For this letter, hitherto unpublished, I am indebted to Dr. 
Karl Helfferich, son-in-law of the late George von Siemens. 

"The italics are mine. 

M Die grosse Politik der europdischen Kabinette, 18/1-1914 
(Berlin, 1922 et seq.), Volume VI, pp. 360-361. (A compilation 
of documents from the files of the Foreign Office, edited by a 
non-partisan commission appointed by the Government of the 
German Republic.) Of Bismarck’s policy in the Near East the 
Ex-Kaiser writes, “Bismarck spoke quite disdainfully of Turkey, 
of the men in high position there, and of conditions in that land. 
I thought I might inspire him in part with essentially more 


GERMANS INTERESTED IN THE NEAR EAST 55 

favorable opinions, but my efforts were of little avail . . . Prince 
Bismarck was never favorably inclined toward Turkey and never 
agreed with me in my Turkish policy.” W. von Hohenzollern, My 
Memoirs, 1878-1918 (New York, 1922), p. 27. 

** Diplomatic and Consular Reports, No. 2950 (1902), p. 20. 

"For information regarding the appointment of Baron Mar- 
schall to Constantinople the author is indebted to Dr. Arthur 
von Gwinner, who believes that the Baron was being sentenced 
to political exile when he was detailed to the Sublime Porte, 
but that his opponents overlooked the possibilities of the em¬ 
bassy at the Ottoman capital. Wile, op. cit., Chapter XVIII, 
gives a short biographical account of Baron Marschall. 

38 Cf. E. Lamy, “La France du Levant: Voyage de l’Empereur 
Guillaume II,” in Revue des deux mondes, Volume 150 (1898), 
pp. 880-911, Volume 151 (1899), pp. 315-348; E. Lewin, The 
German Road to the East (New York, 1917), pp. 105 et seq.; 
C. S. Hurgronje, The Holy War, Made in Germany (New York, 
1915), PP- 70-71; The All Highest Goes to Jerusalem, being an 
English translation of a series of articles published in Le Rire 
(Paris) during 1898 (New York, 1917). In Germany the royal 
pilgrimage was intended to be taken seriously. Herr Heine, of 
the Munich Simplicissimus, was convicted of lese majeste and 
imprisoned for six months for having published humorous car¬ 
toons of the Kaiser and his party on their travels. The Annual 
Register, 1898, pp. 255-258. 

37 The author found some difference of opinion in Germany 
regarding the connection between the Kaiser’s visit and the pend¬ 
ing Anatolian and Bagdad concessions. Dr. von Gwinner denies 
that there was any such purpose behind the Emperor’s trip to the 
East—or, at least, if there was, that it was unsolicited by the 
promoters and not looked upon with favor by them. Dr. Helf- 
ferich, on the other hand, is convinced that His Majesty was 
directly concerned with the desirability of obtaining additional 
railway concessions for German financiers. The Kaiser himself 
agrees with Dr. Helfferich. Cf., My Memoirs, 1878-1918, p. 86. 

” Cf. foreign correspondence in The Times (London), October 
25 , 1898, and days immediately thereafter. 

"For an analysis of this situation see The Manchester Guard¬ 
ian, July 31, 1899, which took the stand that “for no sort of 
mercantile gain would a nation be justified in making friendly 
advances to the blood-stained tyrant of Armenia.” 

* 9 In this connection see Leonard Woolf, Economic Imperialism 
(London and New York, 1920), Chapter I; Ramsay Muir, The 
Expansion of Europe (New York, 1917), Chapter I ; J. E. Spurr 
(editor), Political and Commercial Geology (New York, 1920), 
Chapter XXXII, entitled “Who Owns the Earth?”; Aspi- 


THE BAGDAD RAILWAY 


56 

Fleurimont, “La Question du coton,” in Questions diplomatiques 
et coloniales, Volume 15 (1903), pp. 429-432; J. A. B. Scherer, 
Cotton as a World Power (New York, 1922). In addition, for 
the wider aspects of imperialism, consult H. N. Brailsford, The 
War of Steel and Gold (New edition, London, 1915)1 Chapter 
II; F. C. Howe, Why War? (New York, 1916), passim; Walter 
Lippman, The Stakes of Diplomacy (New York, 1915) 1 J* A. 
Hobson, Imperialism: A Study (London, 1902). 

® W. H. Dawson, The Evolution of Modern Germany (New 
York, 1908), Chapter XII. P. Rohrbach, Deutschland unter den 
Weltvolkern, p. 17. 

“ Riesser, op. cit., pp. no, 121. 

" It should be remarked here that the author is not unaware 
of the fallacy of speaking of “German trade” and “German in¬ 
dustry.” He is cognizant of the fact that trade takes place not 
between countries, but between individuals. If he anthropo¬ 
morphizes the German Empire for the purposes of this descrip¬ 
tion, it is not because of either ignorance or malice, but for 
convenience. 

“ For further consideration of German economic progress dur¬ 
ing the late nineteenth century see: Dawson, op. cit., Chapters 
III, IV, XII, XVI; E. D. Howard, The Cause and Extent of 
the Recent Industrial Progress of Germany (New York, 1907) ; 
T. B. Veblen, Imperial Germany and the Industrial Revolution 
(New York, 1915) ; W. H. Dawson, Industrial Germany (Lon¬ 
don, 1913) ; Karl Helfferich, Germany’s Economic Progress and 
National Wealth (New York, 1913) ; G. Blondel, L’Essor indus- 
triel et commercial du peuple allemand (Paris, 1900). 

"Paul Dehn, Weltwirtschaftliche Neubildungen (Berlin, 1904), 
passim. 

"Bernhard von Biilow, Imperial Germany (English transla¬ 
tion, New York, 1914), pp. 17, 18-20. 

* T The extent of German economic control of central and east¬ 
ern Europe before the War is indicated by Mr. J. M. Keynes, 
in his book The Economic Consequences of the Peace (New 
York, 1920), pp. 17-18: “Germany not only furnished these coun¬ 
tries with trade, but in the case of some of them supplied a 
great part of the capital needed for their own development. 
Of Germany’s pre-war foreign investments, amounting in all to 
about six and a half billion dollars, not far short of two and a 
half billions was invested in Russia, Austria-Hungary, Bulgaria, 
Rumania, and Turkey. And by the system of ‘peaceful pene¬ 
tration’ she gave these countries not only capital, but what they 
needed hardly less, organization. The whole of Europe east of 
the Rhine thus fell into the German industrial orbit, and its 
economic life was adjusted accordingly.” A frank German ad- 


GERMANS INTERESTED IN THE NEAR EAST 5 7 


mission of a policy of a self-sufficient Central Europe is the 
work of Friedrich Naumann, Mittel-Europa, translated into 
English by C. M. Meredith and published under the title Central 
Europe (New York, 1917). See, especially, Chapters IV-VII. 
Cf., also, Ernst zu Reventlow, Deutschlands ausw'drtige Politik 
(3rd revised edition, Berlin, 1916), pp. 336 et seq ; K. H. Muller, 
Die Bedeutung der Bagdadbahn (Hamburg, 1916), p. 29. 

88 Paul Rohrbach, Die Bagdadbahn (Berlin, 1903), p. 16. 

8 * H. A. Gibbons, The Reconstruction of Poland and the Near 
East (New York, 1917), pp. 57-58. The author is not in agree¬ 
ment with either Dr. Rohrbach or Dr. Gibbons. He certainly 
would hesitate to call any imperialist policy “inevitable." 

40 Die deutsche Tiirkenpolitik, p. 8. 


CHAPTER IV 

THE SULTAN MORTGAGES HIS EMPIRE 


The Germans Overcome Competition 

During 1898 and 1899 the Ottoman Ministry of Public 
Works received many applications for permission to con¬ 
struct a railway to Bagdad. Whatever may have been 
thought later of the financial prospects of the Bagdad 
Railway there was no scarcity then of promoters who were 
willing and anxious to undertake its construction. It was 
not because of lack of competition that the Deutsche Bank 
finally was awarded the all-important concession. 

In 1898, for example, an Austro-Russian syndicate pro¬ 
posed the building of a railway from Tripoli-in-Syria to 
an unspecified port on the Persian Gulf, with branches 
to Bagdad and Khanikin. The sponsor of the project was 
Count Vladimir I. Kapnist, a brother of the Russian am¬ 
bassador at Vienna and an influential person at the Tsar’s 
court. Count Kapnist had the support of Pobedonostsev, 
the famous Procurator of the Holy Synod, who was an 
avowed Pan-Slavist and an enthusiastic promoter of Rus¬ 
sian colonization in Asia Minor. 1 The Sultan instructed 
his Minister of Public Works to study the Kapnist plan 
and submit a report. The Austro-Russian syndicate, how¬ 
ever, made no further progress at Constantinople. The 
Sublime Porte obviously was opposed to any expansion 
of Russian influence in Turkey—a point of view which 
received the encouragement of the British and German 
ambassadors. Furthermore, in Russia itself there was 
opposition to Count Kapnist’s project. Count Witte, Im- 

58 


THE SULTAN MORTGAGES HIS EMPIRE 


59 


perial Minister of Finance, and foremost political opponent 
of Pobedonostsev, emphasized the strategic menace to 
Russia of improved railway transportation in Turkey and 
sturdily maintained that Russian capital and technical 
skill should be kept at home for the development of Rus¬ 
sian railways and industry. By the spring of 1899 the 
Kapnist plan had been shelved. 1 2 

In the meantime French bankers had become interested 
in the possibilities of constructing a railway from the 
Mediterranean to the Persian Gulf, utilizing the existing 
railways in Syria as the nucleus of an elaborate system. 
Their spokesman was M. Cotard, an engineer on the staff 
of the Smyrna-Cassaba Railway. This project was pos¬ 
sessed of such strong financial and political support at 
Constantinople that the Deutsche Bank considered it best 
to negotiate for a merger with the French interests in¬ 
volved. 3 Accordingly conversations were held at Berlin 
early in 1899 between the Deutsche Bank and the Ana¬ 
tolian Railway Company, on the one hand, and the Im¬ 
perial Ottoman Bank and the Smyrna-Cassaba Railway, 
representing French interests, on the other. The result 
was an important agreement of May 6, 1899, the chief 
provisions of which were as follows : 4 

1. The Deutsche Bank admitted the Imperial Ottoman 
Bank to participation in the proposed Bagdad Railway Com¬ 
pany. German and French bankers were to be equally rep¬ 
resented in ownership and control, each to be assigned 40% 
of the capital stock, the remaining 20% to be offered to 
Turkish investors. If British, or other capital were subse¬ 
quently interested in the Company, the share of the new 
participants was to be taken from the German and French 
holdings in equal proportions. 

2. A modus vivendi was arrived at between the Anatolian 

and Smyrna-Cassaba Railways. The prevailing rate-war was 

to be stopped; a joint commission was to be appointed to 


6o 


THE BAGDAD RAILWAY 


agree upon a uniform tariff for the two companies; a junc¬ 
tion of the two lines was to be effected and maintained at 
Afiun Karahissar for reciprocal through traffic. 

3. In order to assure the faithful execution of the agree¬ 
ment between the Anatolian and Cassaba railways, each of 
the companies was to designate two of its directors to sit 
on the board of the other.® 

4. French proposals for the construction of a Euphrates 
Valley railway were to be withdrawn. 

5. The French and German bankers were to use their 
best offices with their respective governments to secure united 
diplomatic support for the claims of the Deutsche Bank to 
prior consideration in the award of the Bagdad Railway 
concession. 

This agreement temporarily removed all French oppo¬ 
sition to the Bagdad Railway. M. Constans, the French 
ambassador at Constantinople, joined Baron Marschall 
von Bieberstein in cordial support of the new “Franco- 
German syndicate.” 6 

Competition had arisen, however, from a third source. 
During the summer of 1899 British bankers, represented 
in Constantinople by Mr. E. Rechnitzer, petitioned for 
the right to construct a railway from Alexandretta to 
Bagdad and the Persian Gulf. The terms offered by 
the British financiers were considered more liberal than 

« 

any heretofore proposed, 7 and they were endorsed by the 
Ministry of Public Works. Mr. Rechnitzer enlisted the 
aid of Mahmoud Pasha, a brother-in-law of the Sultan. 
He secured the assistance of Sir Nicholas O’Connor, the 
British ambassador. He attended to the niceties of Orien¬ 
tal business by sending the Sultan and his aids costly 
presents. 8 He engineered an effective press campaign in 
Great Britain to arouse interest in his project. Just how 
much success Mr. Rechnitzer’s plan might have achieved 
on its own merits is an open question. It definitely col- 


THE SULTAN MORTGAGES HIS EMPIRE 61 


lapsed, however, in October, 1899, when the outbreak of 
the Boer War diverted British attention and energies from 
the Near East to South Africa. 9 It was under these cir¬ 
cumstances that the Sultan, on November 27, 1899, 
announced his decision to award to the Deutsche Bank the 
concession for a railway from Konia to Bagdad and the 
Persian Gulf. 10 ^ 

The success of the Germans was not unexpected. They 
had a strong claim to the concession, for, in 1888 and 
again in 1893, the Sultan had assured the Anatolian Rail¬ 
way Company that it should have priority in the construc¬ 
tion of any railway to Bagdad. On the strength of that 
assurance, the Anatolian Company had conducted expen¬ 
sive surveys of the proposed line. 11 After a short period 
of sharp competition for the concession in 1899, the 
Deutsche Bank group was left in sole possession of the 
field—the Russian promoters had withdrawn because of 
lack of support at home; the French financiers had ac¬ 
cepted a share in the German company in preference to 
sole responsibility for the enterprise; the British proposals 
had lost support when the Boer difficulty temporarily ob¬ 
scured all other issues. The diplomatic situation, further¬ 
more, was distinctly favorable to the German claims. The 
Fashoda Affair and the serious Anglo-Russian rivalry in 
the Middle East had served to put Russia, France, and 
Great Britain at sixes and sevens, leaving Germans prac¬ 
tically a free hand in the development of their interests 
in Asia Minor. 

Aside from these purely temporary advantages, however, 
there were excellent reasons, from the Ottoman point of 
view, for awarding the Bagdad Railway concessions to the 
German Anatolian Railway Company. The usual explana¬ 
tions—that the soft, sweet-sounding flattery of William II 
overcame the shrewdness of Abdul Hamid; that Baron 
Marschall von Bieberstein dominated the entire diplomatic 


62 


THE BAGDAD RAILWAY 


situation at the Porte; that the German military mission 
exerted a powerful influence in the final result—are more 
obvious than convincing. These were all contributing fac¬ 
tors in the success of the Germans, but they were not 
determining factors. The reasons for the award of the 
concession to the Deutsche Bank were partly economic, 
partly strategic, partly political. 

The Germans alone submitted proposals which met the 
demands of the Public Debt Administration and the Otto¬ 
man Government. They proposed to extend the existing 
Anatolian Railway from Konia, across the mountains into 
Cilicia and Syria, down the valley of the Tigris to Bagdad 
and Basra and the Persian Gulf. The railway which 
they had in mind would reach from one end of Asiatic 
Turkey to the other; in connection with the railways of 
southern Anatolia and of Syria, it would provide con¬ 
tinuous railway communication between Constantinople 
and Smyrna in the north and west, with Aleppo, Damascus, 
Beirut, Mecca, and Mosul in the south and east. There 
were serious technical and financial difficulties in the 
construction of such a railway, it is true, but there were 
political and economic considerations which warranted 
the expenditure of whatever effort and funds might be 
necessary to carry the line to completion. 

On the other hand, the groups other than the Germans 
proposed the construction of a trans-Mesopotamian rail¬ 
way which did not come up to specifications. They sub¬ 
mitted plans calling for the building of a line from some 
Mediterranean port—such as Alexandretta or Tripoli- 
in-Syria—down the Euphrates valley to the Persian Gulf. 12 
Such a line would have had obvious advantages, from 
the point of view of the concessionaires, over the pro¬ 
jected German railway. The cost of construction would 
have been materially less, for it would have been unneces¬ 
sary to build the costly sections across the Taurus and 



THE SULTAN MORTGAGES HIS EMPIRE 63 

Amanus mountains. The prospects of immediate earning 
power were better, for the railway would have been able 
to take over some of the caravan trade from Arabia to 
the Syrian coast and from Mesopotamia to Aleppo. From 
the Ottoman point of view, however, the proposal was 
altogether unsatisfactory. The railway would have de¬ 
veloped the southern provinces of the empire without 
connecting them with Anatolia, the homeland of the Turks 
themselves and the heart of the Sultan’s dominions. It 
might have promoted a separatist movement among the 
Arabs. Its termini on the Mediterranean and the Persian 
Gulf could have been controlled by the guns of a foreign 
fleet. From every standpoint—economic, political, stra¬ 
tegic—the acceptance of such a proposal was out of the 
question. 

Even had all other things been equal, it is probable 
that the German bankers would have been given preference 
in the award of the concession. The Turkish Govern¬ 
ment was determined that the Anatolian lines should be 
made the nucleus of the proposed railway system for the 
empire. That being the case, no purpose, other than the 
promotion of confusion, would have been served by 
awarding the Bagdad plum to interests other than those 
which controlled the Anatolian Railway Company. This 
reasoning was fortified by the fact that the Company had 
made an enviable record in its dealings with the Ottoman 
Ministry of Public Works. The existing lines were well 
constructed and were being operated in a manner entirely 
satisfactory to the Ottoman Government and to the peas¬ 
antry and business men of Anatolia. And M. Huguenin, 
Assistant General Manager of the Anatolian system, an¬ 
nounced that his Company would observe a similar policy 
in the construction and operation of the proposed Bagdad 
Railway. “We are determined,” he said, “to build a model 
line such as exists nowhere in Turkey, able in all respects 


6 4 


THE BAGDAD RAILWAY 


to undertake efficiently an international service involving 
high speeds over the whole line.” 13 

From the political point of view, too, there were reasons 
for giving preference to German capitalists. Abdul Hamid 
was seeking moral and material assistance for the pro¬ 
motion of his favorite doctrine of Pan-Islamism. He 
sought to foster this movement, which looked toward the 
unification of Islamic communities for resistance to Chris¬ 
tian European domination over the Moslem world. As 
Caliph of the Mohammedan world, Abdul Hamid placed 
himself at the head of those defenders of the faith who 
had been propagating the idea that Mussulmans every¬ 
where must resist further Christian encroachment and 
aggression, be it political, economic, religious, cultural. 
That the Sultan’s primary motives were religious is doubt¬ 
ful. Apparently he believed that the Pan-Islamic move¬ 
ment could be utilized to the greater glory of his dynasty 
and his empire. As the tsars of Russia had utilized their 
position as head of the Orthodox Church for the purpose 
of strengthening the power of the autocracy, so Abdul 
Hamid proposed to exploit his position as Caliph for pur¬ 
poses of personal and dynastic aggrandizement. 14 

In awarding the Bagdad Railway concession, which 
was of such considerable economic and political impor¬ 
tance, it was essential to choose the nationals of a power 
which would be sympathetic toward Pan-Islamism. Would 
it be Russia, whose tsars had set fires in Afghanistan, 
sought to destroy the independence of Persia, and threat¬ 
ened all of the Middle East? Would it be Great Britain, 
whose professional imperialists were holding in subjection 
more than sixty million Mohammedans in India alone? 
Would it be France, whose soldiers controlled the destinies 
of millions of Mussulmans in Algeria and Tunis? These 
nations could have no feeling for Pan-Islamism other than 
fear and hatred, 15 for it threatened their dominion over 


THE SULTAN MORTGAGES HIS EMPIRE 65 

their Moslem colonies. Germany, however, had everything 
to gain and nothing to lose in lending support to Abdul 
Hamid’s Pan-Islamic program. She had practically no 
Mohammedan subjects and therefore had no reason to 
fear Moslem discontent. She had imperial interests which 
might be served by the revolt of Islam against Christian 
domination. 16 

Turkish patriots, as well as Moslem fanatics, would 
have preferred to see Germans favored in the award of 
economic concessions in the Ottoman Empire. The Ger¬ 
mans came to Turkey with clean hands. Their Govern¬ 
ment had never despoiled the Ottoman Empire of territory 
and appeared to have no interests which could not be as 
well served by the strengthening of Turkey as by its de¬ 
struction. On the other hand, Russia, traditional enemy of 
the Turks, sought, as the keystone of her foreign policy, 
to acquire Constantinople and the Straits. France, by 
virtue of her protectorate over Catholics in the lands of 
the Sultan, sought to maintain special privileges for herself 
in Syria and the Holy Land. Great Britain held Egypt, 
a nominal Turkish dependency, and was fomenting trouble 
for the Sultan in the region of the Persian Gulf. 17 Ger¬ 
many, it appeared, was the only sincere and disinterested 
friend of the Ottoman Empire! 

The rising prestige of Germany in the Near East and 
the rapid expansion of German economic interests *in 
Turkey, however, did not, during these crucial years of 
1898-1900, arouse the fear or the cupidity of other Euro¬ 
pean powers. Russia, it is true, objected for strategic 
reasons to the construction of the proposed Bagdad Rail¬ 
way via the so-called “northern” or trans-Armenian route 
from Angora. But when the Tsar was assured by the 
Black Sea Basin Agreement that a southern route from ' 
Konia would be substituted, M. Zinoviev, the Russian min¬ 
ister at Constantinople, withdrew his formal diplomatic 


66 


THE BAGDAD RAILWAY 


protest. 18 The French Government adopted a policy of 
benevolent neutrality toward the claims of the Deutsche 
Bank for the concession, on the ground that the Imperial 
Ottoman Bank, representing powerful financial interests 
in Paris, was to be given a substantial participation in the 
proposed Bagdad Railway Company. The pact of May 6, 
1899, between the German and French promoters satis¬ 
fied even M. Delcasse! 19 

In Great Britain, likewise, there was the friendliest feel¬ 
ing toward the German proposals. When the Kaiser made 
his second visit to the Near East in 1898 the London 
Times said: “In this country we can have nothing but 
good wishes for the success of the Emperor’s journey and 
for any plans of German commercial expansion which may 
be connected with it. Some of us may perhaps be tempted 
to regret lost opportunities for our own influence and our 
own trade in the Ottoman dominions. But we can honestly 
say that if we were not to have these good things for 
ourselves, there are no hands we would rather see them 
in than in German hands.” 20 The Morning Post of 
August 24, 1899, expressed the hope that no rivalry over 
the Bagdad Railway would prejudice the good relations 
between Great Britain and Germany. “So long as there 
is an efficient railway from Haidar Pasha to Bagdad, and 
so long as the door there is open, it should not really 
matter who makes the tunnels or pays the porters. If it 
should be necessary to insist on an open door, the Foreign 
Office will probably see to it; while if it should happen to 
be, as usual, asleep, there are always means of poking it up. 
As a matter of general politics it may not be at all a bad 
thing to give Germany a strong reason for defending the 
integrity of Turkey and for resisting aggression on Asia 
Minor from the North.” 

Sympathetic consideration of German expansion in the 
Near East was not confined to the press. Cecil Rhodes, 


THE SULTAN MORTGAGES HIS EMPIRE 67 

great apostle of British imperialism, visited Germany in 
the spring of 1899 and came away from Berlin favorably 
disposed toward the Bagdad Railway and none the less 
pleased with the Kaiser's apparent enthusiasm for the 
Cape-to-Cairo plan. In November of the same year 
William II paid a royal visit to England. It was then that 
Joseph Chamberlain, Secretary for the Colonies, learned 
the details of German plans in the Ottoman Empire, but, so 
far from being alarmed, he publicly announced his belief in 
the desirability of an Anglo-German entente. The almost 
simultaneous announcement of the award of the prelimi¬ 
nary Bagdad Railway concession met with a favorable 
reception from the British press. 21 

At the same time, however, less cordial sentiments 
were expressed toward Russia and France. There was 
general agreement among the London newspapers re¬ 
garding at least one desirable feature of the Bagdad 
Railway enterprise: the discomfiture it would be certain to 
cause the Tsar in his imperial ambitions in the Near East. 
The Globe characterized as “impudence” the desire of 
Russia to regard Asiatic Turkey as “a second Man¬ 
churia.” 22 No love was being lost, either, on France. 
The Daily Mail of November 9, 1899, said: “The French 
have succeeded in wholly convincing John Bull that they 
are his inveterate enemies. England has long hesitated 
between France and Germany. But she has always re¬ 
spected German character, while she has gradually come 
to feel scorn for France. Nothing in the nature of an 
entente cordiale can exist between England and her near¬ 
est neighbor. France has neither courage nor political 
sense.” 

The Bagdad Railway Concession Is Granted 

It was almost three years after the Sultan’s preliminary 
announcement of the Bagdad concession that the imperial 


68 


THE BAGDAD RAILWAY 


decree was issued. During the interval the German tech¬ 
nical commission was completing its survey of the line; 
details of the concession were being arranged between 
Zihni Pasha, Minister of Public Works, and Dr. Kurt 
Zander, General Manager of the Anatolian Railway Com¬ 
pany; Dr. von Siemens was working out plans for the 
financing of the enterprise. Finally, on March 18, 1902, 
an imperial trade of Abdul Hamid II definitely awarded 
the Bagdad Railway concession to the Anatolian Railway 
Company. 23 

The Constantinople despatches announcing the Sultan's 
award met with a varied reception. In Germany, of course, 
there was general satisfaction and, in some quarters, jubi¬ 
lation. The Kaiser telegraphed his personal thanks to the 
Sultan. In Vienna, the semi-official Fremdenblatt ex¬ 
pressed the opinion that “the construction of the railway 
would be an event of the greatest economic and political 
importance and would materially strengthen Turkey’s 
power of resistance.” 24 M. Delcasse, French Minister of 
Foreign Affairs, interpolated in the Chamber, informed 
the Deputies that, whether one liked it or not, the con¬ 
vention was a fait accompli which France must accept, 
particularly because French capitalists were associated 
with the German concessionaires in the enterprise. 25 The 
Russian Government was silent at the time, although two 
months before M. Witte had informed the press that he 
saw no reason for granting financial assistance or diplo¬ 
matic acquiescence to a possible competitor of Russian 
trans-Asiatic railways. 26 

In England there was very little opposition, but much 
friendly comment, on the German plans. Earl Percy ex¬ 
pressed the hope that Great Britain would do nothing to 
interfere with the construction of the Bagdad Railway. 
“Germany,” he told the House of Commons, “is doing 
for Turkey what we have been doing for Persia, for the 


THE SULTAN MORTGAGES HIS EMPIRE 69 

social improvement and material welfare of native races; 
and in the struggle between the Slavonic policy of com¬ 
pelling stagnation and the Teutonic policy of spreading 
the blessings and enlightenment of civilization, the victory 
will lie with those nations which are striving, selfishly or 
unselfishly, consciously or unconsciously, to fulfil the high 
aims which Providence has entrusted to the imperial races 
of Christendom.” Lord Cranborne, Under-Secretary for 
Foreign Affairs, announced that, although the Govern¬ 
ment had every intention of maintaining the status quo 
in the Persian Gulf, it would not otherwise interfere in 
the project for a German-owned trans-Mesopotamian rail¬ 
way. Lord Lansdowne, Secretary for Foreign Affairs, 
informed the French and German ambassadors at London 
that His Britannic Majesty’s Government would not 
oppose the Bagdad enterprise, particularly if British capi¬ 
tal were invited to participate in its consummation. 27 This 
was taken as a definite promise, for English financiers 
already had been asked to take a share in the Bagdad Rail¬ 
way Company by purchase, pro rata, of portions of the 
holdings of the German and French interests. 28 

Although there was a noticeable lack of unanimity in 
European diplomatic circles, little or no reason existed 
in 1902 to believe that any determined resistance would 
be made to the consummation of the plans for the con¬ 
struction of the Bagdad Railway. The chief difficulties of 
the concessionaires seemed to be not political, but financial 
and administrative. The year 1902 was one of economic 
depression; in Germany, in particular, industrial and finan¬ 
cial conditions were distinctly unfavorable for the flota¬ 
tion of a large bond issue such as would be required to 
raise funds for the construction of the Bagdad Railway. 
Certain of the minor provisions of the convention of 
1902, furthermore, were unsatisfactory to the financiers 
of the project. The concession for the lines beyond Konia 


THE BAGDAD RAILWAY 


7° 

had been granted to the Anatolian Railway Company 
without privilege of assignment to any other corporation. 
This meant that any participation of outside capital in the 
new Bagdad Railway would, of necessity, involve par¬ 
ticipation in the profits of the Anatolian lines already in 
operation—a prospect by no means pleasing to the orig¬ 
inal promoters. Furthermore, there was some question 
as to the advisability of placing under a single administra¬ 
tive head all of the line and branches from Constantinople 
to the Gulf. 29 

It was because of these difficulties, financial and 
administrative, that the Deutsche Bank marked time until 
March 5, 1903, when a revised Bagdad Railway conven¬ 
tion was executed and plans were perfected for the financ¬ 
ing of the first section of the line. It is to this Great 
Charter of the Berlin-to-Bagdad plan that we now must 
turn our attention. 30 

The definitive convention of 1903 provided that the exist¬ 
ing Anatolian lines were to continue in the possession of 
their owners; the construction and operation of the new 
railway beyond Konia was to be vested—without right 
of cession, transfer, or assignment—in a new corpora¬ 
tion, the Bagdad Railway Company. This new company 
was incorporated under Turkish law on March 5, 1903, 
with a capital stock of fifteen million francs, of which 
the Anatolian Railway Company subscribed ten per cent. 
Continued Turco-German control of the railway enterprise 
was assured by a provision of the charter that of the 
eleven members of the Board of Directors, three should 
be appointed by the directors of the Anatolian Railway 
Company, and at least three others should be Ottoman 
subjects. 31 

It was apparent that the Ottoman Government expected 
big things of the German concessionaires and their French 
associates. The new convention provided, first, for the 


THE SULTAN MORTGAGES HIS EMPIRE 71 


construction of a great trunk line from Konia, southeast¬ 
ern terminus of the existing Anatolian Railways, to the 
Persian Gulf. This was to be the Bagdad Railway proper, 
but the concession carried with it, also, the privilege of 
constructing important branches in Syria and Mesopo¬ 
tamia. With all its proposed tributary lines completed, 
the Railway would stretch from the Bosporus to the Per¬ 
sian Gulf and from the Mediterranean to the frontiers 
of Persia. Second, it was stipulated that the Anatolian 
Railway Company should effect any necessary improve¬ 
ments on its lines to make possible the early initiation of 
a weekly express service between Constantinople and 
Aleppo and the operation of fortnightly express trains 
to Bagdad and the Persian Gulf as soon as the lines should 
be completed. The Anatolian concessions were extended 
for a period of ninety-nine years from 1903 to make them 
coincident with the new concession. The concessionaires 
were obliged to make all improvements and to complete 
all new construction by 1911, it being understood, how¬ 
ever, that this time limit might be extended in the event 
of delays by the Government in the execution of the 
financial arrangements or in the event of force majeure —■ 
the latter specifically including, not only a European war, 
but any radical change in the financial situation in Ger¬ 
many, England, or France. 32 

The Locomotive Is to Supplant the Camel 

The Bagdad Railway was to revive the “central route” 
of medieval trade—to traverse one of the world’s historic 
highways. It was to bring back to Anatolia, Syria, and 
Mesopotamia some of the prosperity and prestige which 
they had enjoyed before the explorations of the Portu¬ 
guese and Spaniards had opened the new sea routes to 
the Indies, 33 


72 


THE BAGDAD RAILWAY 


The starting point of the new railway was to be Konia. 
This town of 44,000 inhabitants, situated high in the 
Anatolian plateau, was a landmark in the Near East. 
It was once the capital of the Seljuk Turks and during 
its heyday had been a crossroads of the caravan routes 
of Asia Minor. Along one of these old routes to the 
northwest ran the Anatolian Railway, with which the 
Bagdad line was to be linked. From Konia the new 
railway was to cross the Anatolian table-lands, at an 
average altitude of 3500 feet, passing through the towns 
of Karaman and Eregli. Just beyond the latter town are 
the foothills of the Taurus, the first of the mountain 
barriers between Asia Minor and the Mesopotamian 
valley. In crossing the Taurus range the railway was to 
pass through the famous Cilician Gates, down the eastern 
slope into the fertile Cilician plain. At Adana, center of 
the trade of this region, a junction was to be effected with 
the existing railway to Mersina, a small port on the 
Mediterranean. 34 

Formidable engineering difficulties faced the succeed¬ 
ing stretch of the railway. Beyond Adana stood the 
second mountain barrier of the Amanus range, through 
which there was no natural pass, and it was apparent that 
costly blasting and tunneling would be required before the 
hills could be pierced. 35 Once beyond the mountains the 
railway could be carried quickly to Aleppo, a city of 
128,000, “the emporium of northern Syria/’ and a meet¬ 
ing place for the Mesopotamian, Syrian, and Anatolian 
trade-routes. At this point connections were to be estab¬ 
lished with the important railways of Syria, providing 
direct communication with Hama, Homs, Tripoli-in-Syria, 
Beirut, Damascus, Jaffa, and Jerusalem. In fact, enthusi¬ 
astic Syrians have prophesied that when all projected trans¬ 
continental railways are completed in Europe, Asia, and 
Africa, Aleppo will become “the crossroads of the 


THE SULTAN MORTGAGES HIS EMPIRE 73 

world”—a junction point for rail communication between 
Berlin and Bagdad, Calais and Calcutta, Bordeaux and 
Bombay, Moscow and Mecca, Constantinople and Cairo 
and Cape Town. 36 Seventy miles away from Aleppo, 
along one of the few good wagon roads in Turkey, lay the 
important Mediterranean port of Alexandretta. Leaving 
Aleppo, the Bagdad Railway was to turn east, crossing a 
desert country, to Nisibin and to Mosul, on the Tigris. 
From this sector of the railway it was proposed to con¬ 
struct several short spurs into the Armenian foothills, as 
well as a longer branch from Nisibin to Diarbekr and 
Kharput. 

The city of Mosul is the northern gateway to the Meso¬ 
potamian valley, the “Land of the Two Rivers.” In me¬ 
dieval times it was a center of caravan routes between 
Persia, Mesopotamia, Syria, and Anatolia, and once was 
famed for its textile manufactures, which produced a 
cloth named after the city, “muslin.” It is located on the 
site of a suburb of the ancient city of Nineveh and guards 
a high pass leading through the mountains into Armenia. 
In 1903 it had a population of 61,000 and bade fair, after 
the completion of the Bagdad Railway, to regain some 
of its lost lustre. South and southeast of Mosul flows 
the Tigris River all the way to the Persian Gulf. Along 
the valley of this river was to run the new railway, through 
the towns of Tekrit, Samarra, and Sadijeh, to Bagdad. 37 

In 1903 the splendor of the ancient city of Bagdad was 
very much dimmed. Although it still was the center of 
an important caravan trade with Persia, Arabia, and Syria, 
its prosperity was but a name compared with the riches 
which the city had enjoyed before the commercial revolu¬ 
tion of the sixteenth century. The population of 145,000— 
in part nomad—was to a large extent dependent upon the 
important export trade in dates and cereals, amounting, in 
1902, to almost £1,000,000. All told, the trade of Bagdad 


74 


THE BAGDAD RAILWAY 


was valued at about £2,500,000 annually. Whether the 
shadow of the former great Bagdad could be transformed 
into a living thing was an open question. 38 

Five hundred miles south of Bagdad is the Persian 
Gulf, 39 the proposed terminus of the Bagdad Railway. 
About sixty miles north of the Gulf, located on the Shatt- 
el-Arab—the confluence of the Tigris and Euphrates 
Rivers—is the port of Basra, the outlet for the trade of 
Bagdad. Communication between these two Mesopotamian 
cities was carried on, in 1903, by means of a weekly 
steamer service operated by the English firm of Lynch 
Brothers, under the name “The Euphrates and Tigris 
Steam Navigation Company, Ltd.” The Lynch Brothers— 
typical British imperial pathfinders—had established them¬ 
selves at Basra during the decade 1840-1850 and had suc¬ 
ceeded during the following half-century in securing a 
practical monopoly of the river trade from Bagdad to 
the Persian Gulf. The absence of effective competition 
and the hesitancy of the Turkish Government to grant 
permission for the operation of additional steamers were 
responsible for a totally inadequate service. It was not 
uncommon for freight to stand on the wharves at Bagdad 
and Basra for three months or more awaiting transporta¬ 
tion. Under these circumstances it was to be expected 
that freight charges would be exorbitant; it cost more to 
transfer cargoes from Bagdad to Basra than from Basra 
to London. The advent of the Bagdad Railway promised 
great things for the trade of lower Mesopotamia and 
Persia. 40 

It was the aim of the Turkish Government and the 
concessionaires not only to compete with the river trade 
of the Tigris, but to develop the Euphrates valley as well, 
there being no steamer service on the latter river. With 
this in mind, it was decided to divert the railway beyond 
Bagdad from the Tigris to the Euphrates and down the 


THE SULTAN MORTGAGES HIS EMPIRE 75 

valley to Basra. For a time Basra was to mark the ter¬ 
minus of the railway; the concession made provision, how¬ 
ever, for the eventual construction of a branch “from 
Zubeir to a point on the Persian Gulf to be agreed upon 
between the Imperial Ottoman Government and the con¬ 
cessionaires.” 41 

Of considerable importance was a proposed branch line 
from Sadijeh, on the Tigris, to Khanikin, on the Persian 
frontier. This railway, it was believed, would take the 
place of the existing caravan route from Bagdad to Khani¬ 
kin and thence to Teheran. The annual value of British 
trade alone transported via this route was estimated at 
about three quarters of a million pounds sterling. 42 

The Bagdad Railway, as thus projected, was one of the 
really great enterprises of an era of dazzling railway con¬ 
struction. Here was a transcontinental line stretching 
some twenty-five hundred miles from Constantinople, on 
the Bosporus, to Basra, on the Shatt-el-Arab—a project 
greater in magnitude than the Santa Fe line from Chicago 
to Los Angeles or the Union Pacific Railway from Omaha 
to San Francisco. 43 It was a promise of the rejuvenation 
of three of the most important parts of the Ottoman Em¬ 
pire—eastern Anatolia, northern Syria, and Mesopotamia. 
It was to open to twentieth-century steel trains a fifteenth- 
century caravan route. It was to replace the camel with 
the locomotive. 

The Sultan Loosens the Purse-Strings 

There are special and peculiar problems connected with 
the construction of railways in the economically backward 
areas of the world. In well populated regions, such as 
western Europe, railways have been built to accommodate 
existing traffic; in sparsely populated regions, such as east¬ 
ern Russia and western United States, they have been con- 


7 6 


THE BAGDAD RAILWAY 


structed chiefly to create new traffic. In the economically 
advanced countries of the world the railway has been the 
result of civilization; in the backward countries it has 
been the outpost of civilization. A new railway in an un¬ 
developed region is obliged at the outset to concern itself 
mainly with the upbuilding of the territory through which 
it runs, in order to assure abundant traffic for the future; 
during this period its receipts are rarely, if ever, adequate 
to meet the costs of operation. Private capital cannot be 
expected to assume alone the risk and burden thus in¬ 
volved, but the public service which the railway renders 
during this critical time justifies the government in sub¬ 
sidizing the enterprise until it can become self-supporting. 
The granting of state subventions has been a common 
practice of the nineteenth and twentieth centuries. China 
time and time again has pledged national revenues in 
support of railway construction; the Latin-American coun¬ 
tries have been conspicuous exemplars of the same prac¬ 
tice; more than half of the railways of Russia were 
constructed with government funds. 44 

There was every reason to believe that the Bagdad Rail¬ 
way would be built with some system of state guarantees. 
Almost every railway in Asiatic Turkey at one time or 
another had been the recipient of a government subvention, 
and the proposed trans-Mesopotamian railway faced many 
more obstacles than had faced any then in operation. The 
provinces through which the Bagdad Railway was to pass 
were sparsely settled and were too backward, economically, 
to warrant the construction of a railway for the accommo¬ 
dation of existing traffic; 45 the German technical com¬ 
mission of 1899 pointed out that the estimated gross 
operating revenue for some years would be entirely inade¬ 
quate to pay the expenses of running trains even if there 
should be an unlooked for volume of passenger and mail 
service to India. In time, it was believed, improved 


THE SULTAN MORTGAGES HIS EMPIRE 77 

transportation and greater political security would induce 
immigration and produce wide-spread economic prosperity 
in the provinces of Anatolia, Syria, and Mesopotamia, thus 
assuring financial independence to the railway. 46 During 
the interim, however, a state guarantee appeared to be 
necessary. 

Under the terms of the convention of 1903, the Turkish 
Government undertook partially to finance the construction 
of the Bagdad Railway. For each kilometre of the line 
built the Government agreed to issue to the Company 
the sum of 275,000 francs, nominal value, in Imperial 
Ottoman bonds, to be secured by a first mortgage on the 
railway and its properties. 47 The payment of interest 
and sinking fund on these bonds was to be guaranteed 
by the assignment to the Public Debt Administration for 
this purpose of the revenues of certain of the districts 
through which the railway was to pass. For the purpose 
of financing the first section of two hundred kilometres 
beyond Konia, there was delivered to the Company on 
March 5, 1903, an issue of fifty-four million francs of 
“Imperial Ottoman Bagdad Railway Four Per Cent Bonds, 
First Series.” 48 Similar payment for the construction 
of subsequent sections was to be made the subject of 
further agreement between the Government and the con¬ 
cessionaires. 

In addition to supplying in this manner the actual 
funds for the building of the railway, the Ottoman Gov¬ 
ernment guaranteed gross operating receipts of forty- 
five hundred francs annually for each kilometre of the 
tine open to traffic. If the receipts failed to reach that 
sum, the Government was to reimburse the Company for 
the deficiency. If the receipts amounted to more than 
forty-five hundred francs per kilometre in any given 
year, the excess over that amount to ten thousand francs 
was to belong to the Government; any excess over and 


78 


THE BAGDAD RAILWAY 


above ten thousand francs was to be divided sixty per cent 
to the Government, forty per cent to the Railway. The Gov¬ 
ernment also agreed to reimburse the Company, in thirty 
annual payments of three hundred fifty thousand francs, 
for such improvements as might be necessary to prepare 
the Anatolian Railways for the initiation of a through 
express service to the Persian Gulf and, furthermore, to 
subsidize that express service at the rate of three hundred 
fifty thousand francs annually from the date of the com¬ 
pletion of the main line to Aleppo . 49 

Closely connected with these financial guarantees were 
grants of public lands. Lands owned by the Government 
and needed for right-of-way were transferred to the con¬ 
cessionaires free of any charge. Additional land required 
for construction purposes might be occupied without rental 
as well as worked by the Company for sand and gravel. 
Wood and timber necessary for the construction and 
operation of the railway might be cut from State-owned 
forests without compensation. The concessionaires were 
permitted to operate mines within a zone twenty kilometres 
each side of the line, subject to such regulations as might 
be laid down by the Ministry of Public Works. As a 
public utility, the railway was granted the right of ex¬ 
propriation of such privately owned land as might be 
essential for the right-of-way, as well as quarries, gravel- 
pits, or other properties necessary for purposes of con¬ 
struction. The Company was authorized, also, to conduct 
researches for objects of art and antiquity along the route 
of the railway ! 50 

In the foregoing respects the Bagdad Railway Conven¬ 
tion was by no means revolutionary in character. In issu¬ 
ing its bonds for the purpose of financing railway con¬ 
struction, in pledging public revenues as a guarantee of 
traffic receipts, in granting public lands for right-of-way, 
the Imperial Ottoman Government was following well- 


THE SULTAN MORTGAGES HIS EMPIRE 79 

established precedents of the nineteenth century. The 
United States, for example, had adopted similar measures 
to encourage the building of transcontinental railways. 
To cite a single instance, Congress granted the promoters 
of the Union Pacific system a right-of-way through the 
public domain, twenty sections of land on each side of each 
mile of the railway, and a loan of bonds of the United 
States to an amount of fifty million dollars. Between 
1850 and 1873 alone the Government transferred to the 
railways some thirty-five million acres of public lands, 
an area in excess of that of the State of New York. 51 

In certain other respects, however, the Bagdad Railway 
Convention was radical and far-reaching in its innovations. 
Worthy of first mention among its unusual provisions is 
the sweeping tax exemption granted the concessionaires 
by Article 8 : “Manufactured material for the permanent 
way and materials, iron, wood, coal, engines, cars and 
coaches, and other stores necessary for the initial establish¬ 
ment as well as the enlargement and development of the 
railway and everything pertaining thereto which the con¬ 
cessionaires shall purchase in the empire or import from 
abroad shall be exempt from all domestic taxes and cus¬ 
toms duties. The exemption from customs duties shall 
also be granted the coal necessary for the operation of 
the road, imported abroad by the concessionaires, until 
the gross receipts of the line and its branches reach 15,5°° 
francs per kilometre. Likewise, during the entire period 
of the concession the land, capital, and revenue of the 
railway and everything appertaining thereto shall not be 
taxed; neither shall any stamp duty be charged on the 
present Convention or on the Specifications annexed 
thereto, the additional conventions, or any subsequent in¬ 
struments ; nor on the issue of Government bonds; nor 
on the amounts collected by the concessionaires on account 
of the guarantee for working expenses; nor shall any duty 


8o 


THE BAGDAD RAILWAY 


be levied on their stock, preferred stock and bonds, or on 
the bonds which the Imperial Ottoman Government shall 
issue to the concessionaires.” Thus the Bagdad Railway 
not only was assured of a subsidy constituting a preferred 
claim on certain taxes collected from the Turkish peas¬ 
antry, but, in addition, was exempted from the payment 
of important contributions to the national revenue. The 
extent to which such an arrangement would confound con¬ 
fusion will be clear if one will recall that many other re¬ 
strictions on the collection and disbursement of public 
funds were vested in the Ottoman Public Debt Adminis¬ 
tration. 52 

Incidental to the railway, the Bagdad Company was 
granted other valuable concessions. The corporation was 
given permission to establish and operate tile and brick 
works along the line of the railway. For the direct and 
indirect use of the railway and its subsidiary enterprises 
the Company was .authorized to establish hydro-electric 
stations for the generation of light and power. The 
erection of necessary warehouses and depots was per¬ 
mitted as essential to the proper operation of the railway. 
The Anatolian Railway was empowered to provide for 
satisfactory ferry sendee between Constantinople and 
Haidar Pasha, in order to insure direct sleeping-car service 
from Europe to Asia and to provide other facilities for 
through traffic. All of these subsidiary projects were to 
enjoy the same exemption from taxation as the railway 
itself. 53 

The concessionaires were granted the right of con¬ 
structing at Bagdad, Basra, and at the terminus on the 
Persian Gulf modern port facilities, including “all neces¬ 
sary arrangements for bringing ships alongside the quay 
and for the loading, unloading, and warehousing of goods.” 
During the period of the construction of the railway the 
Company was granted rights of navigation on the Tigris, 


THE SULTAN MORTGAGES HIS EMPIRE 81 


the Euphrates, and the Shatt-el-Arab for the transporta¬ 
tion of materials and supplies necessary to the building 
and operation of the main line and its branches. 64 These 
river and harbor concessions aroused the fear and the 
rage of the Lynch Brothers, who, as we shall see, were to 
be among the leaders of British opposition to the Bagdad 
Railway. 55 

These, then, were the outstanding economic provisions 
of the Bagdad Railway Convention of 1903. The Im¬ 
perial Ottoman Government assumed the cost of the con¬ 
struction of the railway and, in addition, guaranteed a 
certain minimum annual return on each kilometre in opera- 
tion. It pledged for these purposes the taxes of the 
districts through which the railway was to pass, and it de¬ 
puted the Ottoman Public Debt Administration to collect 
these revenues and- supervise payments to the conces¬ 
sionaires. As additional compensation to the Company 
it made large grants of public lands and conceded valuable 
privileges indirectly connected with the construction of 
the railway. In this manner the Sultan mortgaged his 
empire. But mortgages have their purposes, and Abdul 
Hamid hoped for big things from the Bagdad Railway. 

Some Turkish Rights Are Safeguarded 

As mortgagor the Sultan was certain to insist upon 
the recognition and protection of certain rights. To assure 
observance by the concessionaires of their obligations under 
the convention, supervision over construction, operation, 
and maintenance of the railway was vested in the Ministry 
of Public Works, represented by two Imperial Railway 
Commissioners. As a guarantee of good faith the Com¬ 
pany was obliged to deposit with a Constantinople bank a 
bond of £30,000, subject to release only upon the com¬ 
pletion of the entire line. The Ottoman Government was 


82 


THE BAGDAD RAILWAY 


determined, also, that the concession, far-reaching as were 
its implications, should not lead to additional extra-terri¬ 
torial rights, or “capitulations,” in favor of foreign 
powers. The concessionaires were forbidden to contract 
for the transportation of foreign mails, or to perform 
other services for the foreign post offices in Turkey, 
without the formal approval of the Ottoman Government. 
It was specified, also, that, inasmuch as the Anatolian and 
the Bagdad Railway Companies were Ottoman joint- 
stock corporations, all disputes and differences between 
the Government and the Companies, or between the Com¬ 
panies and private persons, “arising as a result of the 
execution or interpretation of the present Convention and 
the Specifications attached thereto, shall be carried before 
the competent Ottoman courts.” It was further provided 
that the concessionaires “must correspond with the State 
Departments in Turkish, which is the official language 
of the Imperial Ottoman Government!” 56 
The Government was sincere in its determination that 
the railway should become a powerful instrument in the 
economic development of the backward provinces of the 
empire. A significant clause specified that the section 
between Bagdad and Basra should not be placed in opera¬ 
tion before the section between Konia and Bagdad should 
have been opened to traffic, although immediate operation 
of trains on the former section would have enabled the 
Company to compete with the valuable trade of the Lynch 
Brothers on the Tigris. The traffic between Bagdad and 
Basra would have been profitable and would thus have 
decreased by a considerable figure the total subsidies the 
Treasury might be obliged to pay for railway operation. 
It was of more immediate concern to the Turkish Gov¬ 
ernment, however, that southern Mesopotamia should be 
connected by an economic and political link with the 
rest of the Sultan’s dominions. Elaborate regulations 



THE SULTAN MORTGAGES HIS EMPIRE 83 

were laid down regarding a minimum train service which 
the Company was required to supply, and it was specified 
in this connection that Turkish mails, together with postal 
employees and officials, should be transported without 
charge and under such other conditions as the Government 
might stipulate. To forestall discriminatory treatment 
of passengers and shippers maximum rates were prescribed 
for all classes of traffic, including express, insurance, and 
similar supplementary services; it was decreed that “all 
rates, whether they be general, special, proportional, or 
differential, are applicable to all travelers and consignors 
without distinction”; the concessionaires were “formally 
prohibited from entering into any special contract with 
the object of granting reductions of the charges specified 
in its tariffs.” 57 This last provision was of the utmost 
importance, as it enabled Germans and Turks alike to 
point to the railway as an outstanding example of the 
economic “open door.” 

One of the chief interests of the Turkish Government 
in the construction of the Bagdad Railway was the possi- r 
bility of its utilization for military purposes. In time of 
peace for purposes of maneuvers or the suppression of 
rebellion, in time of war for purposes of mobilization, the 
Company was required, upon requisition of the military 
authorities, to place at the disposal of the Government its 
“entire rolling stock, or such as might be necessary, for 
the transportation of officers and men of the army, navy, 
police or gendarmerie, together with any or all equip¬ 
ment.” The Government undertook to maintain order 
along the line and to construct such fortifications as it 
might consider necessary to defend the railway against 
invading armies, and the Company was obliged to expend, 
under the direction of the Minister of War, a total of 
four million francs for the construction of military sta¬ 
tions. To give effect to all of these provisions, a special 


84 


THE BAGDAD RAILWAY 


military convention was to be drawn up and approved 
by the Company and the Minister of War. 58 

Upon the expiration of the concession all rights of the 
concessionaires in the railway, port works, and other sub¬ 
sidiary enterprises were to revert, free of all debt and 
liability, to the Imperial Government. In the meantime, 
a semblance of Turkish nationality was to be assured the 
enterprise by the stipulation that the railway employees 
and officials should wear the fez and such uniform as might 
be approved by the Government. It was contemplated, 
also, that within five years after the opening of each sec¬ 
tion to traffic the whole of the operating staff, except the 
higher officials, should be composed exclusively of Otto¬ 
man subjects. 59 

Appended to the Bagdad Railway Convention was a 
secret agreement binding the Company not to encourage 
or instal foreign settlements or colonies in the vicinity of 
the Anatolian or Bagdad Railways. 60 Although the Sultan 
had mortgaged his empire, at least he was determined to 
retain possession! 61 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

x On this point cf. M. Solovieff, La Terre Sainte et la societe 
imperiale de Palestine (Petrograd, 1892). The society there re¬ 
ferred to was said to be liberally patronized by the Tsar and 
other members of the imperial family. 

a For details of the Kapnist plan see The Times (London), 
December 17, 1898; The Euphrates Valley Railway —a prospectus 
(London, 1899). 

8 In a memorandum of June 10, 1899, to the Sultan, Dr. Kurt 
Zander, General Manager of the Anatolian Railway Company, 
said that, in accordance with the wishes of the Sultan—and “to 
avoid all obstacles and avert every possibility of opposition”— 
his Company sought to arrive at a satisfactory understanding 
with the Smyrna-Aidin and Smyrna-Cassaba railways. All pro¬ 
posals to the Smyrna-Aidin Company, however, “met with 
evasive answers, which finally resulted in a termination of nego- 


THE SULTAN MORTGAGES HIS EMPIRE 85 

tiations.” Cf. r also, E. Auble, Bagdad—son chcmin de fer , son 
importance, son avenir (Paris, 1917), pp. 9 et seq. 

4 For a copy of the text of this agreement the author is in¬ 
debted to Mr. E. Rechnitzer. Summaries were published in The 
Times, August 10, 1899; Le Temps (Paris), August 15, 1899; 
Corps de droit ottoman, Volume IV, pp. 155-156. 

6 In June, 1899, the Anatolian Railway Company elected to its 
Board of Directors M. L. Rambert, of the Imperial Ottoman 
Bank, and in June, 1900, M. Gaston Auboyneau, of the same 
institution. The new directors replaced Mr. George Henry 
Maxwell Batten, of London, and Sir Edward F. G. Law, of the 
Ottoman Public Debt Administration. The refusal of the 
Smyrna-Aidin line to come to a working agreement with the 
Anatolian Company thus removed the last British directors from 
the board of the latter. Cf. Reports of the Anatolian Railway 
Company, 1898-1900, ’ passim. 

8 A letter from Mr. E. Rechnitzer to the Sultan, dated August 
16, 1899, accuses M. Constans of having publicly referred to the 
“accord” between French and German interests in Turkish rail¬ 
ways. Dr. Karl HelfTerich states that the agreement between 
the two railway companies was supplemented by a gentlemen’s 
agreement between the two ambassadors. Die Vorgeschichte des 
Weltkrieges (Berlin, 1919), p. 127. This would seem to be con¬ 
firmed by Andre Cheradame, op. cit., pp. 48 et seq. 

7 The proposals previously made called for an absolute guar¬ 
antee of several thousands of francs income per kilometre per 
annum. Mr. Rechnitzer’s plan called for “an annual guarantee 
of 15,000 francs in gross receipts per kilometre, the said guar¬ 
antee to be paid exclusively out of the excess of the tithes of the 
vilayets through which the railway is to pass; it being under¬ 
stood that in the event that the excess of such tithes be not 
sufficient to defray the kilometric guarantee, the concessionaire 
shall have no redress against the Imperial Government on account 
of the insufficiency.” Memorandum of May 14, 1899, from Mr. 
Rechnitzer’s files. Although this plan had the great advantage 
of requiring no immediate payments from the Ottoman Treasury, 
it probably would have cost Turkey more in the long run, for 
the guarantee specified was excessively high. Compare with 
provisions of the Bagdad Railway concession of March, 1903, 
infra. Mr. Rechnitzer also asked for extensive port priv¬ 
ileges in Alexandretta and in the port to be determined on the 
Persian Gulf. The chief features of the plan were outlined in 
a pamphlet published in London, July 29, 1899, entitled The 
Euphrates Valley Railway. 

8 Mr. Rechnitzer now has in his possession a beautiful watch— 
inlaid with a map of the Ottoman Empire, in precious stones, 


86 


THE BAGDAD RAILWAY 


showing the route of the proposed Euphrates Valley Railway—- 
which he presented to Abdul Hamid in 1899. He repurchased it 
at a public auction held in Paris after the Young Turk revolu¬ 
tion of 1909. 

•In a letter dated September 30, 1922, to the author Mr. Rech- 
nitzer outlines the situation as follows: “My offer being much 
more favorable than that of the Germans, it seemed likely in 
August, 1899, that it would be accepted. Unfortunately the 
Transvaal War broke out in the autumn of that year, and the 
German Emperor, a few days after the declaration of war, spe¬ 
cially came to London to ask our Government to give him a 
free hand in Turkey. It appears that there was an interview 
between the Emperor and Mr. Joseph Chamberlain, who was 
more interested in Cecil Rhodes’ scheme in Africa than in my 
scheme in Turkey. As a consequence Sir Nicholas O’Connor 
was instructed to inform the Turkish Government that th^ 
British Government’s support was withdrawn from my offers.” 
It is only fair to add, however, that there may have been other 
factors in the situation. The Financial News (London), of 
August 17, 1899, intimated that Mr. Rechnitzer’s proposal did 
not have sufficiently strong financial backing; that it was more 
Austrian than British; that the support of the British Govern¬ 
ment was more formal than whole-hearted. 

10 Report of the Anatolian Railway Company, 1899, pp. 9-10; 
The Annual Register, 1899, p. 292. Simultaneously the Sultan 
granted the Deutsche Bank group a concession for the construc¬ 
tion of port and terminal facilities at Haidar Pasha, across the 
Straits from Constantinople. Sweeping privileges were granted 
for the building of docks, stations, sidings, and quays to a sub¬ 
sidiary of the Anatolian Railway, the Haidar Pasha Port Com¬ 
pany. The latter company completed a handsome station and 
terminal at Haidar Pasha in 1902, the year before the definitive 
Bagdad Railway concession. Furthermore, it entered into close 
cooperation with the Mahsoussie Steamship Company, a Gov¬ 
ernment-owned company operating a ferry service between Con¬ 
stantinople and the Asiatic side of the Straits; in this manner 
adequate service was assured passengers and freight from Euro¬ 
pean to Asiatic points. The text of the concession is to be 
found in Corps de droit ottoman, Volume III, pp. 342-351. Cf., 
also, Report of the Anatolian Railway Company, 1902, p. 8. 

13 Supra , pp. 31-34. 

n The single exception was Mr. Rechnitzer’s plan, which pro¬ 
vided that within five years of the award of the concession, the 
Sultan might require the construction of a spur from Alexan- 
dretta to Konia, on terms to be agreed upon between the Govern¬ 
ment and the concessionaire. The chief feature of Mr. Rech- 


THE SULTAN MORTGAGES HIS EMPIRE 87 


nitzer’s plan, however, unquestionably was the railway from 
Alexandretta to the Persian Gulf— i.e., the Syrian and Mesopo¬ 
tamian, not the Anatolian and Cilician, sections. Furthermore, 
there were political objectives connected with the Rechnitzer 
proposal which, however attractive to British imperialists, could 
not have been regarded with equanimity by the Sultan. The 
following are typical quotations from Mr. Rechnitzer’s pros¬ 
pectus: “It has long been the object of English statesmen to 
consolidate the position of England in the Persian Gulf, where 
British interests (both political and commercial) are now para¬ 
mount. With a railway in this region controlled by British 
interests ... a very strong foothold would accrue to British 
influence” (p. 12). Among the advantages of the proposed rail¬ 
way are listed the following (pp. 17-18) : “It will place under 
British control two important ports, one on the Mediterranean 
and the other on the Persian Gulf; it will strengthen British 
influence in Turkey and in the Persian Gulf, and indirectly, in 
Persia and Afghanistan; it will afford England powerful means 
of exercising her influence over the territory of Central Persia, 
and of establishing new commercial enterprises over an enormous 
area of unexploited country of exceptional wealth.” 

“Quoted by A. D. C. Russell, “The Bagdad Railway,” in The 
Fortnightly Review, Volume 235 (1921), p. 312. Cf., also, Corps 
de droit ottoman > Volume IV, pp. 153 et seq. 

14 Pan-Islamism started as a religious and cultural revival but 
rapidly took on political and economic significance. Later, in 
connection with Turkish nationalism (see infra, Chapter IX), it 
became a serious international problem. A short, popular dis¬ 
cussion of the rise of Pan-Islamism is Lothrop Stoddard’s The 
New World of Islam (New York, 1921), Chapters I, II, V. 
Cf., also, Mohammedan History, No. 57 of the Foreign Office 
Handbooks (London, 1920), Part I; G. Charmes, L’avenir de la 
Turquie: le pan-islamisme (Paris, 1883) ; A. J. Toynbee, Nation¬ 
ality and the War (London, 1915), PP- 399 - 4 H, and Turkey: a 
Past and a Future (New York, 1917) ; Tekin Alp, Turkismus 
und Pantiirkismus (Weimar, 1915) ; C. Snouck Hurgronje, The 
Holy War, ‘Made in Germany” (New York, 1917)- Regarding 
Abdul Hamid’s place in the Pan-Islamic movement cf. Moham¬ 
medan History, pp. 42-46. 

“Great Britain, characteristically enough, took steps to pro¬ 
tect her interests by reviving the Arabian caliphate— i.e., by 
supporting the claims of the Sherif of Mecca to the caliphate. 

“ Infra, pp. 127-128. 

11 Regarding British activities in Koweit, cf. infra, pp. 197-198. 

M Infra, p. 149. 

19 Infra, pp. i 55" I 57 ; Cheradame, op. cit., pp. 267 et seq.; K. 


88 


THE BAGDAD RAILWAY 


Helfferich, Die V orgeschichte des Weltkrieges (Berlin, 1919), pp. 
124 et seq. 

20 The Times, October 28, 1898 

21 Annual Register, 1899, pp. 289-291; Parliamentary Debates, 
House of Commons, Volume 120 (1903), p. 1247, Volume 126 
(1903), P- 108; W. von Hohenzollern, My Memoirs, 1887-1918, 
pp. 84-86, 101-103. 

23 The Globe, August 10, 1899. Cf., also, The Morning Herald, 
August 10, 1899, and The Westminster Gazette, August 11, 1899. 

23 No attempt is made here to analyze the convention of March 
18, 1902 (which had been preceded by a draft convention of 
January 8, 1902), as it was superseded by the convention of 
March 5, 1903. Cf. infra, pp. 70-71, 77-84. The text of the con¬ 
vention of 1902 is to be found as an appendix to R. LeCoq, Un 
chemin de fer en Asie Mineure (Paris, 1907). George von Sie¬ 
mens (1839-1901) did not live to see the consummation of his 
great plans for the development of Turkish railways. After his 
death in 1901 his work was taken up by his successor as Managing 
Director of the Deutsche Bank, Dr. Arthur von Gwinner. For 
a short account of the life of von Siemens see an obituary by 
Professor J. Riesser, in Bank-Archiv, No. 2, November, 1901. 
The work of von Siemens in the development of German eco¬ 
nomic enterprises in the Near East is told in a biography by his 
son-in-law, Dr. Karl Helfferich, Georg von Siemens (Leipzig, 

1923). 

**The Times, January 25, 1902. 

25 Journal othciel, Debats parlementaires, Chambre des deputes, 
1902, pp. 1468 et seq. 

M The Times, January 25, 1902. 

27 Parliamentary Debates, House of Commons, Volume 101, pp. 
129, 597, 628, 669, Volume 120 (1903), p. 1371 . 

28 Report of the Anatolian Railway Company, 1901, p. 17; The 
Times, January 25, 1902. 

29 Annual Register, 1902, pp. 290-291; Report of the Bagdad 
Railway Company, 1904, p. 7. 

20 La Socicte Imperiale Ottotnane du Chemin de Fer de Bagdad- 
Firman, Convention, Cahier des Charges, Statuts, in French and 
Turkish (Constantinople, 1905) ; translated into English in 
Parliamentary Papers, No. Cd. 5635, Volume CIII (1911), No. 
1. Where references are here given to the convention itself, no 
preceding identifying word will be given, the citation being 
merely, e.g., Article I. The Statuts will be referred to as “By- 
Laws” and the Cahier des Charges as “Specifications.” 

81 Turco-German control of the Board of Directors was not 
inconsistent with the agreement of 1899 between the Deutsche 
Bank and the Imperial Ottoman Bank, which assured French 


THE SULTAN MORTGAGES HIS EMPIRE 89 

interests only 40%. of the shares of the Bagdad Railway Com¬ 
pany. Por details of the organization of the Company see the 
Report of the Anatolian Railway Company, 1903, pp. 4-7; By- 
Laws, passim. 

82 Articles 1-4, 7, 12, 37-39; Specifications, Article 30. 

88 In this connection see Sir W. M. Ramsay, The Historical 
Geography of Asia Minor (London, 1890) ; D. G. Hogarth, The 
Nearer East (London, 1902); Jastrow, op. cit., Chapter II; Sir 
C. W. Wilson, Murray's Handbook for Asia Minor (London, 
1895 and 1900) ; R. Fitzner, Anatolien-Wirtschaftsgeographie 
(Berlin, 1902) ; F. Dernburg, Auf deutscher Bahn in Kleinasien 
(Berlin, 1892). Good general accounts of the regions through 
which the Bagdad Railway was to run are: Baron E. von der 
Goltz, Reisebilder aus dem griechisch-tiirkischen Orient (Halle, 
1902) ; R. Oberhummer and H. Zimmerer, Durch Syrien und 
Kleinasien (Berlin, 1899) ; E. Banse, Die Tiirkei; eine moderne 
Geographie (Berlin, 1916) ; Sir Mark Sykes, The Caliph’s Last 
Heritage — A Short History of the Turkish Empire (London, 
I 9 i 5 )> Part 2, Chapters II and IV. A well-informed article 
describing the projected route of the Bagdad railway is one by 
a member of the German technical commission, “Die anatolischen 
Eisenbahnen und ihre Fortsetzung bis zum persischen Golf,” in 
Archiv fiir Eisenbahnwesen, Volume 26 (1903), pp. 75-90. 

34 For a description of the line from Konia to Adana, including 
an historical sketch of the principal towns served by the railway, 
cf. Karl Baedeker, Konstantinopel und das westliche Kleinasien 
(Leipzig, 1905), pp. 156-172, and Konstantinopel, Balkanstaaten, 
Kleinasien, Archipel, Cypern (second edition, Leipzig, 1914), pp. 
270-306, generously supplied with excellent maps. 

35 A popular account of the engineering difficulties facing the 
construction of the railway from Adana to Aleppo is to be 
found in The Scientific American, supplement, Volume 51 (1901), 
pp. 21248-21249. 

30 Cf. W. H. Hall (of the Syrian Protestant College in Beirut), 
The Near East (New York, 1920), particularly an interesting 
map, p. 174. According to the convention of 1903, Article 1, 
Aleppo was to be connected with the main line by a branch from 
Tel-Habesh, but in 1910 the route was changed, on petition of 
the inhabitants, to include Aleppo as a station on the Bagdad 
line itself. Report of the Bagdad Railway Company, 1910, p. 8. 
Statistics regarding the population of Aleppo and other cities 
along the line are taken, unless otherwise indicated, from the 
Statesman’s Year Book, 1903, passim. 

37 Article 38; “The Trade of the Mesopotamian Valley,” in 
Commerce Reports, No. 280 (Washington, 1912), pp. 1050-1065, 
and No. 256 (1913), pp. 350-358; Karl Baedeker, Palestine and 


90 


THE BAGDAD RAILWAY 


Syria, with the chief routes through Mesopotamia and Babylonia 
(fourth edition, Leipzig, 1906), pp. 351-411. 

88 Valentine Chirol, The Middle Eastern Question, or Some 
Political Problems of Indian Defence (New York, 1903), pp. 
179-182. 

89 This is the distance by the Tigris and the Shatt-el-Arab; as 
the crow flies, the distance is about 150 miles shorter. 

40 Regarding the Lynch Brothers see David Fraser, The Short 
Cut to India (London, 1909), pp. 42 et seq .; Mesopotamia, p. 30; 
The Near East, August 11, 1916, p. 358; infra, pp. 190-191. 

41 Article 1, which describes in detail the route of the Bagdad 
Railway and its branches. 

"Chirol, op. cit., p. 179; Supplement to Daily Consular and 
Trade Reports, Annual Series (Washington, 1915). 

43 The distances on the Bagdad Railway may be estimated as 
follows: 

Haidar Pasha to Ismid 
Ismid to Eski Shehr. . 

Eski Shehr to Konia.. 

Konia to Basra.. 

Branch lines, about.... 


Total . 3,773 kilometres, 

or approximately 2,400 miles. This does not include the section 
of the Anatolian Railway from Eski Shehr to Angora, a distance 
of 311 kilometres, or 194 miles additional. The Atchison, Topeka 
and Santa Fe Railway from Chicago to Los Angeles is 2,246 
miles in length. The distance from Chicago to San Francisco 
via the Chicago and Northwestern-Union Pacific system is 2,261 
miles. Official Guide of the Railways of the United States 
October, 1921, pp. 679, 825. 

44 Cf., e.g., T. W. Overlach, Foreign Financial Control in China 
(New York, 1919), passim; La Gaceta Oficial of the Republic 
of Cuba for the years 1911 and 1912, regarding the Ferrocarril 
de la Costa Norte de Cuba; the Statesman's Year Book, 1903, 
p. 1044. 

"The average population per square mile in eastern Anatolia 
was 27, in northern Syria 31, in Mesopotamia 13. 

40 Diplomatic and Consular Reports, 1903, No. 3140, pp. 26-27; 
Sir William Willcocks, The Recreation of Chaldea (Cairo, 1903). 

"This financial assistance was granted at the rate of 11,000 
francs per kilometre, payable annually throughout the ninety-nine 
years of the concession. The obligation was capitalized and met 
by the issue of 4% bonds as here described. 


9i 

174 

444 

2,264 

800 


kilometres 


a 


a 


a 









THE SULTAN MORTGAGES HIS EMPIRE 91 


48 Bagdad Railway Loan Contract, March 5, 1903. M. Leon 
Berger, President of the Ottoman Public Debt Administration, 
and a French citizen, was one of the signatories of this docu¬ 
ment. The bonds of the loan were issued in denominations of 
500 francs, 408 marks, 20 pounds sterling, 22 pounds Turkish, 
and 245 Dutch florins, in order to facilitate their sale in the 
international securities markets. The Deutsche Bank was made 
fiscal agent for all transactions in connection with the loan, with 
the single qualification that it was to appoint as its Paris agent 
the Imperial Ottoman Bank, representing the French interests 
in the enterprise. The syndicate apparently made a profit of 
over 2,500,000 francs on the transaction, as the bonds were deliv¬ 
ered to the concessionaires, under Article 35 of the Convention, 
valued at 81^2% of par but were sold at 86.40. 

* Articles 35 and 37. 

" Articles 6, 10, 22, 27. 

“ Cf. W. A. Dunning, Reconstruction, Political and Economic, 
1865-1877 (New York, 1907L pp. 145, 227; H. V. Poor, Manual 
of the Railroads of the United States (New York, 1869), pp. 
xlvi-xlvii. 

“ Supra, p. 11. 

“ Articles 13, 24, 25, 33; Speducations, Article 4. 

“ Articles p and 23. 

6B Infra, pp. 190-191. 

M Articles 5, 18, 29, 34. 

87 Article 29; Specifications, Articles 21, 24, 25, 29, 30. 

" Articles 15, 26, 45; Specifications, Article 26. 

” Articles 20 and 21. Another sop to Turkish pride was Article 
46, which required the Company to contribute annually to the 
Constantinople Poorhouse the sum of £500. 

" The Times, March 14, 1903, contained a report of this secret 
appendix. A denial was issued by the Berlin National Zeitung 
of March 18, 1903, but the existence of the supplementary agree¬ 
ment was confirmed by Dr. von Gwinner in 1909 (op. cit., p. 
1092). Djavid Bey, in a memorandum to the author, has stated 
that the Ottoman Government considered this appendix of the 
utmost importance. 

“A proviso of the concession of 1903 was that the Deutsche 
Bank was to float an Ottoman Four Per Cent Loan of March, 
1903, to an amount of about $10,000,000. Parliamentary Papers, 
1920, No. Cmd. 964, pp. 57-58. 


CHAPTER V 

PEACEFUL PENETRATION PROGRESSES 

The Financiers Get Tiieir First Profits 

The convention of March, 1903, marked the beginning, 
not the end, of the work of the promoters of the Bagdad 
Railway. Ahead of Dr. von Gwinner 1 and his associates 
lay all sorts of obstacles, some of which proved to be 
insurmountable. There were the financial difficulties and 
risks attendant upon the task of borrowing and expending 
the funds for the construction of the railway—estimated 
at about one hundred million dollars. There were the 
technical difficulties of constructing a line across obstinate 
mountain barriers and inhospitable desert plains. There 
were the political difficulties of retaining the friendship 
of notoriously fickle Ottoman ministers and of preventing 
diplomatic opposition on the part of foreign powers. 
Events proved that this was to be a thorny path indeed— 
a path which was to lead through political intrigue, diplo¬ 
matic bargaining, a Turkish revolution, and a world war. 

The concessionaires began work in a manner indicative 
of a determination to succeed in spite of all obstacles. The 
Bagdad Railway Company was incorporated in Constanti¬ 
nople, March, 1903, under the joint auspices of the 
Deutsche Bank and the Imperial Ottoman Bank, as pro¬ 
vided by their mutual agreement of 1899. Almost imme¬ 
diately an invitation was extended to British capitalists to 
participate in the enterprise. Three-cornered negotiations 
were conducted by German, French, and British bankers— 
under the watchful eyes of their respective foreign offices— 

92 


PEACEFUL PENETRATION PROGRESSES 


93 


to arrive at some satisfactory plan for internationalization 
of the railway. An agreement was reached by the financiers 
by which British capital was to share equally in ownership 
and control with the German and the French, but the 
hostile attitude of the English press and the disapproval 
of the Balfour Government led to the abandonment of 
the proposed tripartite syndicate. 2 

Failing to secure British cooperation, the concessionaires 
proceeded to finance the Bagdad Railway by other means. 
Ten per cent of the stock of the Company was subscribed 
by the Ottoman Government, ten per cent by the Anatolian 
Railway Company, and the remainder by an international 
syndicate headed by the Deutsche Bank. The Board of 
Directors was enlarged to twenty-seven members, as fol¬ 
lows: eight Germans, chosen by the Deutsche Bank; three 
Germans elected by the Anatolian Railway Company; 
eight Frenchmen designated by the Imperial Ottoman 
Bank; four Ottomans; two Swiss; one Austrian; and one 
Italian. 3 The control of the Bagdad Railway Company 
thus remained in Turco-German hands, but French and 
other interests were too well represented to justify the 
criticism that the railway was a purely German enterprise 
secretly cooperating with the German Foreign Office. In 
fact, in 1903 Mr. Balfour and Lord Lansdowne were as 
much alarmed by the possibility of pernicious French ac¬ 
tivities in the line as they were disturbed by the pre¬ 
dominantly German character of the scheme. 4 Baron von 
Schoen, one-time German Foreign Secretary, described the 
Bagdad Railway as “an Ottoman enterprise which has an 
international character under German guidance.” 5 

The great resources of the Deutsche Bank were now 
brought into play to provide the funds for the construction 
of the first section of the railway. The necessary capital 
was to be secured, it will be recalled, 6 by the sale of an 
issue of Imperial Ottoman Bagdad Railway Bonds amount- 


94 


THE BAGDAD RAILWAY 


ing to 54,000,000 francs. With comparatively little diffi¬ 
culty the German share of the loan was subscribed, but 
the allotment of the Imperial Ottoman Bank and its asso¬ 
ciates was not so easily disposed of, because of the decision 
of the French Government to exclude the Bagdad Railway 
Bonds from the Bourse. Nevertheless, the entire loan 
was successfully underwritten, and by November, I 9 ° 3 » 
preparations had been completed for the construction of 
the line from Konia to Bulgurlu, a distance of 200 
kilometres. 7 

Building of the railway went forward with great 
rapidity, and the rails reached Bulgurlu by early autumn, 
1904. On October 25, the Sultan’s birthday, this first 
section of the Bagdad Railway was opened to traffic with 
pompous ceremonies. And well might the concessionaires 
have celebrated! Not only had they passed the first mile¬ 
stone of their great task, but they had made a comfortable 
profit on their operations. By numerous economies the 
Bagdad Railway Company had saved 3,697,000 francs of 
the 54,000,000 francs allowed by the Ottoman Government 
to defray the costs of construction. The commissions of 
the bankers in underwriting the bond issue, it was said, 
raised the total profit on the first section of the railway— 
before a single train had been operated—to about 6,000,000 
francs. 8 This surplus, however, was not all available for 
distribution among the concessionaires. A reserve fund 
of almost 4,000,000 francs was established to provide for 
the subsequent construction of the costly sections across 
the Taurus and Amanus mountains. The promoters had 
to be reimbursed for preliminary expenditures, such as the 
expensive surveying of the entire line from Konia to the 
Persian Gulf. Included in these “out of pocket” pay¬ 
ments was a large item for backshish —gratuities to Otto¬ 
man dignitaries. “Nobody,” said Dr. von Gwinner, “hav¬ 
ing done business in Turkey ignores the fact that backshish 


PEACEFUL PENETRATION PROGRESSES 95 

on the Bosporus ruled supreme and was hitherto an abso¬ 
lute condition of any contract. We had to pay in propor¬ 
tion to the importance of a business of some £20,000,- 
000.” 9 Djavid Bey informs the author that the item of 
backshish must have amounted to almost £100,000, “for 
during the Hamidian regime friendship between sovereigns 
was not enough to bring about the granting of a con¬ 
cession.” 

Within nineteen months after the Turkish Government 
had issued its bonds to cover the cost of the project, the 
first section of the Bagdad Railway, from Konia to 
Bulgurlu, had been completed. The success of the con¬ 
cessionaires in this part of the enterprise might have been 
taken as a criterion of rapid progress with the further 
construction of the line to the Persian Gulf. Such an 
expectation, however, would have been premature. Be¬ 
yond Bulgurlu lay the Taurus mountains and innumerable 
engineering difficulties which could be overcome only 
after the expenditure of considerable time and money. 
The Turkish Government, furthermore, was in no position 
to issue additional bonds to the amount of fifty or sixty 
millions francs to cover the costs of constructing the second 
section of the line. Interest and sinking fund charges 
on the first issue of Bagdad Railway bonds were a serious 
drain on the treasury; additional charges of a like character 
could be met only by an increase of the customs revenues 
of the Empire. Such an increase could not be effected, 
however, except by international agreement, because under 
existing treaties between Turkey and the Great Powers all 
import duties were fixed at eight per cent ad valorem } 0 

In 1903, coincident with the first issue of bonds for the 
Bagdad Railway, the Ottoman Government had requested 
permission to increase these duties to eleven per cent but 
had been unable to obtain the consent of the interested 
nations. It was not until 1906, after prolonged and irri- 


96 


THE BAGDAD RAILWAY 


tating negotiations, that the Powers agreed to a three per 
cent increase, effective in July of the following year. Even 
then, however, the higher duties were assented to under a 
number of restrictions which rendered difficult the diver¬ 
sion of the increased revenue to the payment of railway 
guarantees; elaborate regulations were incorporated in 
the treaties prescribing expensive reform of the govern¬ 
ment of Macedonia and costly readjustments in the cus¬ 
toms administration. 11 

By 1908, nevertheless, Turkish fiscal affairs were in a 
sufficiently satisfactory state to enable the Government 
to conclude arrangements for the construction of succeed¬ 
ing sections of the Bagdad Railway. On June 2 of that 
year an imperial irade was granted authorizing the exten¬ 
sion of the line from Bulgurlu to Aleppo and thence east¬ 
ward to El Helif (near Nisibin), a distance of some eight 
hundred and forty kilometres. The completion of this 
portion of the line would bring the railway to a point about 
eleven hundred miles from Constantinople and only a 
little over seven hundred miles from Basra. Arrange¬ 
ments were effected for the immediate issue of the Im¬ 
perial Ottoman Bagdad Railway Four Per Cent Loans, 
Second and Third Series, to an amount of one hundred 
and eight million and one hundred and nineteen million 
francs respectively, to provide the capital necessary for 
the building of the railway. Interest and sinking fund 
payments on these loans were guaranteed from the surplus 
of net revenues accruing to the Imperial Government from 
the Ottoman Public Debt. In case of emergency, certain 
taxes (notably the cattle tax) of the vilayets of Konia, 
Adana, and Aleppo were pledged for this purpose. 12 

Only a month after the conclusion of this convention 
the Near East was thrown into a state of turmoil as a 
result of the outbreak of the first of the Young Turk 
revolutions. Under these circumstances it appeared inex- 


PEACEFUL PENETRATION PROGRESSES 97 

pedient to the Bagdad Railway Company to push con¬ 
struction of its line until such time as a reasonable degree 
of security should be restored. It was not until December, 
1909, therefore, after the deposition of Abdul Hamid, 
that good friend of German enterprise in Turkey, that 
a construction company was formed to build the railway 
across the Taurus and Amanus mountains. During the 
autumn of the same year a Franco-German syndicate un¬ 
derwrote the second and third series of Bagdad Railway 
loans, thereby providing the necessary funds for the 
work. 13 

The Bankers’ Interests Become More Extensive 

The years 1904 to 1909 were lean years, judged by 
actual progress in the laying of rails from Bulgurlu to 
Bagdad and Basra. Nevertheless, they were years charac¬ 
terized, on the part of the investors interested in the con¬ 
summation of the great enterprise, by every possible ac¬ 
tivity to prepare the way for eventual success on a grand 
scale. In the spring of 1906, for example, Dr. Karl 
ITelfferich was appointed assistant general manager of 
the Anatolian Railways, and one year later was elected 
a managing director of the Deutsche Bank with general 
supervision over all of the Bank’s railway enterprises in 
the Near East. The appointment of Dr. Helfferich—who, 
although he was only thirty-four years of age, had achieved 
an international reputation—aroused widespread comment 
and turned out to be an event of first-rate importance in 
the history of the Bagdad Railway. As a young professor 
of political science in the University of Berlin, Dr. Helffe¬ 
rich won general recognition as an unusually able econo¬ 
mist. He was persuaded to enter the Government service 
in 1901 and became assistant secretary in the Colonial De¬ 
partment of the Ministry of Foreign Affairs. He was 


9 8 


THE BAGDAD RAILWAY 


known to be in the good graces of the Emperor and of 
Prince von Billow, and it was said that he became their 
chief adviser on Near Eastern affairs. 14 The choice of 
such a distinguished person as directing genius of the 
Anatolian and Bagdad Railways gave renewed confidence 
in Germany that the Bagdad plan would succeed. In 
Great Britain the appointment was considered an ominous 
sign that a very real connection existed between the eco¬ 
nomic enterprises of the Deutsche Bank and the Near 
Eastern activities of the German Foreign Office. 15 

In 1907 the Anatolian Railway Company, under a con¬ 
tract with the Turkish Government, completed arrange¬ 
ments for the irrigation of the desert plain southeast of 
Konia. It was planned to water artificially about one 
hundred and fifty thousand acres of arid land, thus render¬ 
ing the region independent of weather conditions. The 
effects of such an improvement would be far-reaching. 
Much idle land would be made available for profitable 
farming, and the yield of soil already under cultivation 
would be developed materially. Increased production 
might lead to a surplus of agricultural products for export, 
and the greater purchasing power of a prosperous Ana¬ 
tolian farming class would stimulate import trade. Agri¬ 
culture, commerce, and manufacturing alike, therefore, 
could be served. The Anatolian Railway Company issued 
some 135,000 new shares of stock to defray its part of 
the expenses, hoping to be richly compensated by in¬ 
creased traffic on the railway. The Imperial Ottoman 
Treasury issued £800,000 of Konia Irrigation Bonds, an 
outlay which it hoped to offset by increased taxes from 
the Konia district, by rentals and sales of irrigated lands, 
and by decreased guarantees to this section of the rail¬ 
way. 16 

A number of German banks, meanwhile, were pushing 
their financial operations in the Near East. The success 


PEACEFUL PENETRATION PROGRESSES 


99 


of the Deutsche Paldstina Bank 17 encouraged the forma¬ 
tion of other similar institutions. The Nationalbank fur 
Deutschland, in 1904, founded the Banque d’Orient, with 
offices in Hamburg, Athens, Constantinople, Salonica, and 
Smyrna. The following year the Dresdner Bank, in 
cooperation with other large Austro-German financial in¬ 
stitutions, inaugurated the important Deutsche Orientbank, 
with a capital stock of sixteen million marks. This latter 
bank took over the Hamburg and Constantinople offices of 
the Banque d’Orient and established a large number of 
branches of its own, including those at Alexandria, Cairo, 
and Smyrna. The Deutsche Orientbank became an active 
promoter of industrial enterprises in Asiatic Turkey; for 
example, in 1908 it organized La Societe pour Enterprises 
Electriques en Orient, a company which proceeded to take 
over the surface railways as well as the electric light and 
power concession of Constantinople. In 1908 the Deutsche 
Bank itself formally opened an office in Constantinople 
for the transaction of a general banking business. 18 

The entry of these German banks into the Near Eastern 
field was of no small importance to the British and French 
financial institutions already there. The German bankers 
allowed liberal rates of interest on time and check deposits 
and permitted reasonable overdrafts at low rates. These 
practices were in sharp contrast with the rigid regulations 
of the older-established banks. The Deutsche Bank under¬ 
took to collect claims of local merchants against the Turk¬ 
ish Government; through its influence in the Government 
departments it cut red tape and secured payments which 
otherwise might have been delayed for years. Constanti¬ 
nople business men welcomed their emancipation from 
the ultra-conservative methods of the older institutions, 
and it was not long before a very thriving business was 
being transacted by the German banks and their agencies 
in the Near East. 19 Here was a high-powered bomb to 


100 


THE BAGDAD RAILWAY 


disturb the quiet which heretofore had ruled in the bank¬ 
ing community of Constantinople and of Asiatic Turkey. 
Germans were disturbing the financial, as well as the com¬ 
mercial and industrial, status quo in the Near East! 

The advance of the German banks in Turkey was almost 
certain to be the first step in a more general industrial 
and commercial penetration. This will be the more 
readily understood if one recalls the close cooperation 
which characterized the relationships between the German 
banks and the business interests of the empire. This co¬ 
operation—which amounted, in effect, to financial interde¬ 
pendence—was one of the striking features of the German 
economic advance in the generation before the Great War. 
It strengthened German industrial enterprises at home 
and promoted German trade and investments abroad. If 
a great business needed capital, the banks furnished the 
necessary funds by the purchase of securities which made 
them at once creditors and copartners in that business. 
Sooner or later this connection would find expression in 
the appointment of a representative of the bank on the 
supervisory council of the industrial enterprise; oc¬ 
casionally a “captain of industry” would be elected to the 
board of directors of the bank. Although this procedure 
of interlocking directorates was not unique to Germany— 
it was an established practice in the United States, cer¬ 
tainly—there was no country in which these alliances were 
so far-reaching, or in which financial power was so cen¬ 
trally controlled, as in the German Empire. In Germany 
finance and industry were wedded—permanently united for 
better or for worse. 20 

Of this alliance of banking and business the Deutsche 
Bank, chief promoter of the Bagdad Railway, was a shin¬ 
ing example. Its industrial connections were too numer¬ 
ous to catalogue. It enjoyed intimate financial relations 
with hundreds of companies engaged in every important 


PEACEFUL PENETRATION PROGRESSES ioi 


branch of manufacturing in Germany; it was represented 
on the directorates of the North German Lloyd and Ham¬ 
burg-American steamship lines; it was the organizer of 
and chief stockholder in the German Petroleum Company. 
It was the owner of a number of overseas banking cor¬ 
porations stretching their activities from South America 
on the west to China on the east. The officers of the 
Deutsche Bank firmly believed that the export of capital 
and the export of commodities should go hand in hand. 
The other banks associated in the Bagdad Railway enter¬ 
prise likewise were closely affiliated with important indus¬ 
trial enterprises. For example, the Dresdner Bank held 
the vice-chairmanship of Ludwig Loewe & Company, 
prominent manufacturers of munitions, and the chairman¬ 
ship of the Orenstein Koppel Company, manufacturers 
of railway supplies. The Bank fiir Handel und In¬ 
dustrie possessed interests in the Allgemeine Elektrizitats- 
Gesellschaft, the German General Electric Company. A 
still further evidence of this close association of financial 
and industrial interests was furnished in January, 1905, 
when the chief German banks entered into a “community 
of interests” with August Thyssen and Hugo Stinnes, 
the steel and coal barons of Germany. 21 

If German business men were likely to be interested in 
the economic development of Asia Minor, what was the 
nature of this interest? 

Broader Business Interests Develop 

Speaking to the Reichstag in March, 1908, Baron von 
Schoen, Foreign Secretary of the Empire, explained a 
few of the opportunities which the Bagdad Railway opened 
to German industry and commerce. “The advantages,” he 
said, “which accrue to Germany from this great enterprise, 
conceived on a grand scale, are obvious. In the first place, 


102 


THE BAGDAD RAILWAY 


there arises the prospect of considerable participation of 
German industry in the furnishing of rails, rolling stock, 
and other railway materials. Furthermore, German en¬ 
gineers, German construction workers, and German con¬ 
tractors are very likely to find remunerative occupation in 
the construction of the railway. Finally, it is certain that 
with the rising civilization and the higher standard of 
living of the inhabitants of the country, a new market 
will be made available. That this territory will be opened 
up not merely for us, but also for other nations, we can 
allow without envy. . . . What we have in view is the 
development of regions that seem to be worth developing; 
we wish to cooperate in awakening from a sleep of a 
thousand years an ancient flourishing civilized region, 
thereby creating a new market for ourselves and others.” 22 

This same idea had been advanced by others on other 
occasions. The Alldcutsche Blatter of December 17, 
1899, had prophesied that the construction of the railway 
by a German-controlled syndicate would result in the pur¬ 
chase of some eighty million dollars’ worth of German 
products and that, once completed, the railway would open 
to German business an enormous and wealthy market. 
Lord Ellenborough, speaking in the House of Lords of 
the United Kingdom, on May 5, 1903, expressed the 
opinion that “the capital disbursed in constructing the 
railway would be largely spent on German steel industries, 
and on salaries to German engineers and German sur¬ 
veyors, so that even if the railway, as a railway, were a 
failure, it would not be a total loss to Germany.” 23 The 
British Consul General at Constantinople pointed out, in 
1903, that, in addition to all of the aforementioned ad¬ 
vantages, there would be innumerable special opportuni¬ 
ties for the remunerative investment of German capital 
in the regions traversed by the railway. 24 

Events seemed to establish the wisdom of these ex- 


PEACEFUL PENETRATION PROGRESSES 103 

pressions of opinion. Rails for the Bagdad line were 
ordered in Germany from the Steel Syndicate ( Stahl - 
werksverband ). Transportation of materials from Eu¬ 
rope to the Near East was arranged for through German 
steamship companies. German engineers were given the 
executive positions in the construction and operation of 
the railway. Important subsidiary companies were formed 
for the construction of port and terminal facilities, for 
the building of irrigation works, and for other purposes 
incidental to the railway proper. German banks established 
branches on the ground in order to take advantage of 
other opportunities for the profitable investment of sur¬ 
plus funds. 25 

There was much evidence, however, to indicate that 
the preeminently German character of the railway was 
not preserved. An English observer, after a trip over 
the Anatolian lines in 1908, wrote that he noted a great pre¬ 
dominance of Turkish, Greek, and Italian employees over 
the Germans. “The fact is,” he maintained, “that the 
people who run the line, though Germans, care first for 
their own pockets and next for Germany. They buy or 
employ what is cheapest and most suitable and do not 
care a finger-snap for the origin of an article or a servant. 
Patriotism occupies a small place in the calculations of 
promoters. The tendency to deal with the Fatherland 
must always be strong, but it is founded chiefly on the 
fact that the German knows the goods available in his 
own country better than the goods of other countries and 
that credit and banking facilities are more easily obtained 
at home. The master impulse in every German engaged 
in business in Turkey, as in business men of every other 
nationality, is to make money for himself as soon as 
possible.” This same observer pointed out that there was 
an astonishing absence of German employees in even the 
more responsible positions of the Anatolian Railway and 


104 


THE BAGDAD RAILWAY 


that the great majority of the unskilled laborers were 
Italians. 26 

Ultra-patriotic Germans, furthermore, denounced Dr. 
von Gwinner and his associates for not making the Bagdad 
Railway an exclusively Teutonic enterprise. A speaker 
at a Berlin branch of the Pan German League had this 
to say of the situation: “The Bagdad Railway, which in its 
origins was entirely German, has, thanks to the criminal 
negligence of the Deutsche Bank, become almost wholly 
French. The German schools along the line of the Rail¬ 
way, which were established by von Siemens, have fallen 
into decay. The officials of the Railway speak French. 
The ordinary language for transacting the business of the 
Railway is French, although the French share of the capital 
is only thirty per cent. The German engineers may as well 
be called home to-day as to-morrow.” 27 

Nevertheless, the rapid expansion of German financial 
interests in the Near East and the established policy of the 
German banks to encourage and assist export trade were 
factors in a remarkable development of German trade in 
the Ottoman Empire, as will be indicated by the following 
table : 28 



Exports from 

Imports to 


Turkey to 

Turkey from 

Year 

Germany—Marks 

Germany—Marks 

1900. 


34,400,000 

1901. 


37,500,000 

1902. 


43,300,000 

1903. 


50,200,000 

1904. 

. 43,500,000 

75,300,000 

1905. 


71,000,000 

1906. 


68,200,000 

1907. 


81,500,000 

1908. 


64,000,000 

1909. 


78,900,000 

1910. 


104,900.000 

1911. 


112,800,000 














PEACEFUL PENETRATION PROGRESSES 105 


This table eloquently describes the nature of the advance 
of German economic interests in Turkey. It does not, 
however, tell the whole story. Was this advance the re¬ 
sult of a general increase of prosperity in the Ottoman 
Empire in which the Germans shared in common with 
other traders ? Or was the increase in German trade out 
of proportion to the progress of other nationals—perhaps 
at the expense of the French and British? The following 
tables will help answer these questions: 29 



Exports from 
To United 

Turkey 

To 

Austria 


Kingdom 

To France 

To Italy 

Hungary 

Year 

Marks 

Marks 

Marks 

Marks 

1900... 


86,220,000 

22,520,000 

35,220,000 

1901... 



26,120,000 

31,540,000 

1902... 

.. 130,520,000 

83,040,000 

28,980,000 

35,580,000 

1903-.. 

.. 127,400,000 

81,200,000 

38,120,000 

39,900,000 

1904... 

.. 122,760,000 

73,120,000 

31,300,000 

39,120,000 

1905... 

.. 118,960,000 

80,780,000 

42,240,000 

37,640,000 

1906... 

.. 129,440,000 

91,600,000 

45,100,000 

39,300,000 

1907... 

.. 136,600,000 

95,320,000 

50,480,000 

34,640,000 

1908... 

.. 109,220,000 

70,760,000 

44,580,000 

34,360,000 

1909... 


79,000,000 

59,080,000 

36,600,000 

1910... 

.. 100,660,000 

77,000,000 

48,000,000 

43,340,000 


Imports to Turkey 

From United From 

From 

Austria 


Kingdom 

France 

From Italy 

Hungary 

Year 

Marks 

Marks 

Marks 

Marks 

1900... 

.. 102,920,000 

29,800,000 

29,720,000 

53,440,000 

1901... 

.. 128,220,000 

37,880,000 

43,800,000 

57,100,000 

1902... 

.. 123,980,000 

37,200,000 

40,400,000 

61,380,000 

1903.•• 

.. 114,020,000 

36,640,000 

45,360,000 

65,120,000 

1904... 

.. 151,960,000 

40,880,000 

53,280,000 

77,600,000 

1905... 

• • 139,300,000 

42,420,000 

57,200,000 

76,660,000 

1906... 

.. 167,040.000 

47,300,000 

70,900,000 

92,620,000 

1907... 

.. 147,380,000 

46,380,000 

63,040,000 

89,920,000 

1908... 

.. 145,260,000 

51,600,000 

58,700,000 

69,240,000 

1909... 

.. 156,280,000 

54,600,000 

67,740,000 

77,040,000 

1910... 


58,400,000 

94,000,000 

107,300,000 

























io 6 


THE BAGDAD RAILWAY 


Certain important conclusions may be drawn from these 
statistics: 

1. British trade continued during the decade 1900-1910 
to dominate the Near Eastern market. With total im¬ 
ports and exports in the latter year of over 277,000,000 
marks it was in no immediate danger of being outstripped 
by its nearest rivals—a German trade of about 172,000,000 
marks and an Austro-Hungarian trade of about 150,000,- 
000 marks. 

2. France, whose Near Eastern trade in 1900 had 
proudly held a position second only to that of the United 
Kingdom, was being obliged to accept a less prominent 
place in the economic life of the Ottoman Empire. Dur¬ 
ing the first ten years of the new century French merchants 
obviously were being outmaneuvered by Germans, Austro- 
Hungarians, and Italians. In spite of a total increase of 
17% in exports and imports between France and Turkey 
it was apparent that French trade was not keeping the 
pace; during the same period Austro-Hungarian trade 
showed an increased valuation of 81%, German trade of 
166%. 

3. Although it continued to dominate the Near Eastern 
market, British commerce, likewise, was losing ground. 
Between 1900 and 1910 it showed an increase of only 
25% as compared with the Italian record of 172% during 
the same period. During the decade British exports, 
although showing an increased valuation, fell off from 
35% to 22^% of the total import trade of Turkey; for 
the same period German exports achieved not only an 
absolute gain of almost eighty million marks, but also a 
relative increase from 2^2% to n^% of the whole. 

4. The advance of German trade was not equal to the 
advance of Italian trade in the Ottoman Empire during 
the same period. This explains, in part, the rapidly in¬ 
creasing political interest of Italy in the Near East and 


PEACEFUL PENETRATION PROGRESSES 107 

seems to set at rest the notion that the Germans acquired 
a stranglehold on exports and imports from and to Turkey. 

5. Looking at the question from a purely political 
standpoint, one’s attention is struck by the fact that 
commercial laurels in the Ottoman Empire were going 
to the nationals of the Triple Alliance powers. Economi¬ 
cally, Turkey was leaning toward the Central Powers. 
Few international alliances are not based upon coinci¬ 
dence of economic interests; it appeared that a solid 
foundation was being laid for the eventual affiliation of 
Turkey with the Triple Alliance. 

Sea Communications are Established 

Exports and imports, however, are not the only items 
which enter into the international balance sheet. As has 
been so amply demonstrated in the experience of the 
British Empire, ocean freights may constitute one of the 
chief items in the prosperity of a nation which lives upon 
commerce with other nations. It was not surprising, 
therefore, that upon the heels of German banks and Ger¬ 
man merchants in the Near East closely followed those 
other great promoters of German economic expansion, 
the steamship companies. The success of the Deutsche 
Levante Linie, established in 1889, 30 indicated that there 
was room for additional service between German ports 
and the cities of the Aegean and the Mediterranean. Ac¬ 
cordingly, in 1905, the Atlas Line, of Bremen, inaugurated 
a regular service from the Baltic to Turkish ports. One 
line was to ply between Bremen and Smyrna, with Rot¬ 
terdam, Malta, Piraeus, Salonica, and Constantinople as 
ports of call. Another of this same company’s lines was 
/ to carry freight and passengers from Bremen to the 
Syrian city of Beirut. During the same year the North 
German Lloyd was responsible for the formation of the 


io8 


THE BAGDAD RAILWAY 


Deutsche Mittelmeer Levante Linie, providing service be¬ 
tween Marseilles and Genoa and Smyrna, Constantinople, 
Odessa, and Batum. 31 The considerable increase of trade 
between Germany and Turkey made a very real place for 
these lines, especially in the transportation of such com¬ 
modities as could not be expected to bear the heavy charges 
of transportation by rail through the Balkans and over¬ 
land to German cities. These lines were put into operation 
to provide for a traffic already in existence and waiting 
for them. 

Such was not the case, however, with the establishment 
of German steamship service to the Persian Gulf. Here 
British trade had been dominant for centuries. The Ger¬ 
man railway invasion had not as yet reached Mesopotamia, 
and German trade in this region was negligible. The es¬ 
tablishment of a German steamship service to Basra would 
be equivalent to the throwing out of an advance guard 
and reconnaissance expedition on behalf of German trade. 
Incidentally it would mean the destruction of the practical 
monopoly which had been enjoyed by the British in the 
trade of Irak. It was considered of no slight importance, 
therefore, when, in April of 1906, the Hamburg-American 
Line announced its intention of establishing a regular 
service between European ports and the Persian Gulf. An 
office of the Company was immediately opened at Basra, 
and in August the first German steamer, with a German 
cargo, made its way up the Shatt-el-Arab. Soon afterward 
the Hamburg-American Line inaugurated, also, a service 
between British ports and Mesopotamia, and it provided 
a regular schedule of sailing dates, a luxury to which 
merchants doing business in the Near East had not here¬ 
tofore been accustomed. With the aid of a government 
subsidy the German company cut freight rates in half. 
This rude disturbance of the status quo in the shipping 
of the Persian Gulf dealt a severe blow to British com- 


PEACEFUL PENETRATION PROGRESSES 109 

panies engaged in the carrying trade between European 
ports and Mesopotamia. After a futile rate war the 
British lines, represented by Lord Inchcape, came to an 
agreement, in 1913, with their German competitors, end¬ 
ing a rivalry which had been the cause of considerable 
concern on the part of their respective foreign offices. 32 

In order to cooperate with the attempts of Germans to 
have a share in the trade of the Mesopotamian valley, the 
German Government established a consulate at Bagdad in 
1908. The services of this consulate, supplementing the 
pioneer work of the Hamburg-American Line, had im¬ 
mediate results in the development of commercial rela¬ 
tionships with the Land of the Two Rivers. The value 
of exports from Basra to Germany increased from about 
half a million dollars in 1906 to slightly in excess of a 
million dollars in 1913; German goods received at Basra 
during the same period increased from about half a million 
dollars to almost nine million dollars. Herr von Mutius, 
the German Consul at Bagdad, conducted an active cam¬ 
paign of education and propaganda, urging upon business 
men at home the importance of participating further in 
the development of the economic resources of the land of 
the Arabs. 33 

The establishment of steamship communication be¬ 
tween Europe and Asiatic Turkey was welcomed by the 
Bagdad Railway Company. To widen the scope of use¬ 
fulness—and, consequently, to increase the revenues— 
of the railway it was essential that every feeder for freight 
and passenger service be utilized. This was a considera¬ 
tion in the agreement with the Smyrna-Cassaba line and 
in the purchase, in 1906, of the Mersina-Tarsus-Adana 
Railway. 34 The establishment of connections with the 
former system developed a satisfactory volume of traffic 
with Smyrna. The acquisition of the latter line provided 
direct connections with the Mediterranean coast. 


no 


THE BAGDAD RAILWAY 


Nevertheless, the promoters of the Bagdad Railway 
were by no means satisfied with their terminal ports. Con¬ 
stantinople was at a disadvantage as compared with 
Smyrna in the trade of Anatolia. Smyrna was within 
reach of the Bagdad system only over the tracks of a 
French-owned line which might not always be in the 
hands of well-disposed owners. The prospects that the 
Railway soon would reach Basra were not very bright. 
Mersina was limited in its possibilities of development— 
shut off by the mountains from Anatolia, on the north, 
and Syria, on the south, it was the natural outlet only for 
the products of the Cilician plain. 

The port which the company sought to bring under 
its control was Alexandretta, on the Mediterranean, 
seventy miles from Aleppo. Article 12 of the concession 
of 1903 assured preference to the Bagdad Railway Com¬ 
pany in the award of a “possible extension to the sea 
at a point between Mersina and Tripoli-in-Syria.” The 
construction of a branch from the main line to Alexan¬ 
dretta would provide the Railway with sea communica¬ 
tions for the valuable trade of northern Syria and the 
northern Mesopotamian valley, then almost entirely de¬ 
pendent upon the caravan routes centering in Aleppo. Ac¬ 
cordingly, negotiations were begun in the spring of 1911 
looking toward the building of a branch line to Alex¬ 
andretta and the construction of extensive port facilities at 
that harbor. 

Serious financial difficulties were encountered, however, 
in the promotion of this plan. The Young Turk budget 
of 1910 had announced that no further railway conces¬ 
sions carrying guarantees would be granted. Even had 
the Government been disposed to depart from its avowed 
intention, it would have been unable to do so. Suffering 
from the usual malady of a young government—lack of 
funds—it was running into debt continually and finding 


PEACEFUL PENETRATION PROGRESSES in 


it increasingly difficult to borrow money. Early in 1911 
the Imperial Ottoman Treasury addressed a request to the 
Powers for permission to increase the customs duties 
from eleven to fourteen per cent ad valorem. Great Britain 
immediately announced its determination to veto the pro¬ 
posed revision of the revenues, unless the increase were 
granted with certain important qualifications. Sir Edward 
Grey informed the House of Commons, March 8: “I wish 
to see the new regime in Turkey strengthened. I wish to 
see them supplied with resources which will enable them 
to establish strong and just government in all parts of the 
Turkish Empire. I am aware that money is needed for 
these purposes, and I would willingly ask British trade 
to make sacrifices for these purposes. But if the money 
is to be used to promote railways which may be a source 
of doubtful advantage to British trade, and still more if the 
money is going to be used to promote railways which will 
take the place of communications which have been in the 
hands of British concessionaires [i.e., the Lynch Brothers], 
then I say it will be impossible for us to agree to that 
increase of the customs duty until we are satisfied that 
British trade interests will be satisfactorily guarded.” 35 
This clear pronouncement of British policy made it plain 
that no increased Turkish customs revenues could be di¬ 
verted to the proposed Alexandretta branch. It was even 
doubtful if further funds would be forthcoming for the 
construction of the main line beyond El Helif. 

This complicated domestic and international situation 
led to the conventions of March 21, 1911, between the Im¬ 
perial Ottoman Government and the Bagdad Railway 
Company. One of these conventions provided for the 
construction of a branch line of the Bagdad Railway from 
Osmanie, on the main line, to Alexandretta, but without 
kilometric guarantee or other subsidy from the Turkish 
Government. A second convention leased for a period 


112 


THE BAGDAD RAILWAY 


of ninety-nine years to the Haidar Pasha Port Company 
the exclusive rights of constructing port and terminal 
facilities at Alexandretta—including quays, docks, ware¬ 
houses, coal pockets, and elevators. As in the case of the 
Bagdad Railway itself, public lands were to be at the dis¬ 
posal of the concessionaires without charge, and private 
lands were to be subject to the law of expropriation if 
essential for the purposes of the Company. Within the 
limits of the port the Company was authorized to main¬ 
tain a police force for the maintenance of order and the 
protection of its property. 30 

Because of the refusal of the Powers to permit an in¬ 
crease in the customs, the Turkish Government was unable 
to assign further revenues to the payment of railway 
guarantees. The Bagdad Railway Company thereupon 
agreed to proceed with the construction of the sections 
from El Helif to Bagdad without additional commitments 
from the Imperial Ottoman Treasury. The Company like¬ 
wise renounced its right to build the sections beyond 
Bagdad, including its concession for the construction of 
port works at Basra, with the proviso, however, that this 
section of the line, if constructed, be assigned to a Turkish 
company internationally owned and administered. 37 This 
surrender by the Bagdad Railway Company of its rights 
to the pledge of additional revenues by the Ottoman 
Treasury and its surrender of its hold on the sections of 
the railway beyond Bagdad are by far the most important 
^ provisions of the conventions of March 21, 1911. 

German opinion, as a whole, considered these self- 
denying contracts of the Company an indication of the 
willingness of the Deutsche Bank and the German Govern¬ 
ment to go more than half way in removing diplomatic 
objections to the construction of the Bagdad Railway. 38 
There were Englishmen, however, who felt that the con¬ 
ventions of 1911 were a mere gesture of conciliation; in 


PEACEFUL PENETRATION PROGRESSES 113 

their opinion the renunciation of these important rights 
was bait held out to win foreign diplomatic support and 
to induce the participation of foreign capital in the Rail¬ 
way and its subsidiary enterprises. Lord Curzon, for ex¬ 
ample, expressed to the House of Lords his belief that 
technical and financial difficulties made it impossible for 
the German bankers to proceed with the construction of 
the Bagdad line without the assistance of outside capital. 
He was firmly of the opinion that no railway stretching 
from the Bosporus to the Gulf could be financed by a 
single Power. 39 

The unsettled political conditions in Turkey, mean¬ 
while, had delayed, but not halted, construction of the Bag¬ 
dad Railway. The years 1910 and 1911 were marked 
by progress on the sections in the vicinity of Adana. 
From that Cilician city the railway was being laid west¬ 
ward to the Taurus Mountains, eventually to pass through 
the Great Gates and meet the tracks already laid to Bul- 
gurlu. Eastward the line was being constructed in the 
direction of the Amanus mountains, although there seemed 
to be little chance for an early beginning of the costly 
tunneling of the barrier. During 1911 and 1912 attention 
was concentrated on the building of the sections east of 
Aleppo, which in 1912 reached the Euphrates River. The 
branch line to Alexandretta was completed and opened to 
traffic November 1, 1913. 40 Financial difficulties in the 
way of further construction of the main line were over¬ 
come in the latter part of 1913, when the Deutsche Bank 
disposed of its holdings in the Macedonian Railways and 
the Oriental Railways to an Austro-Hungarian syndicate. 
The funds thus obtained were re-invested in the Bagdad 
Railway, and the necessity was obviated for a further sale 
of securities on the open market . 41 Ln 1914 ^ ie Amanus 
tunnels were begun, a great steel bridge was thrown across 
the Euphrates, the sections east of Aleppo were constructed 


THE BAGDAD RAILWAY 


114 

almost to Ras el Ain, in northern Mesopotamia. In ad¬ 
dition, rails were laid from Bagdad north to Sadijeh, on 
the Tigris, before the outbreak of the Great War. 42 

Thus far we have considered the Bagdad Railway almost 
entirely as a business undertaking. In its inception, in 
fact, it was generally thus regarded throughout Europe. 
As time passed, however, the enterprise overstepped the 
bounds of purely economic interest and entered the arena 
of international diplomacy. The greatest usefulness of the 
Bagdad Railway was in the economic services it was 
capable of rendering the Ottoman Empire and, further, 
all mankind. Its widest significance is to be sought in the 
part it played in the development of German capitalistic 
imperialism. Its greatest menace was its consequent 
effects upon the relations between Turkey, Germany, and 
the other Great Powers of Europe. The succeeding chap¬ 
ters will deal with the political ramifications of the Bagdad 
enterprise. 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

*Dr. Arthur von Gwinner (1856- ) is one of the most dis¬ 

tinguished of modern financiers. He was born, appropriately 
enough, at Frankfort-on-the-Main when that city was a center 
of international finance. His father, a lawyer, was an intimate 
friend of Schopenhauer and the latter’s executor and biographer. 
In 1885 young Gwinner married a daughter of Philip Speyer 
and thus became a member of one of the famous families of 
bankers in Europe and America. For a time he conducted a 
private banking business in Berlin, but in 1894 he became an 
active director of the Deutsche Bank. Two years later he was 
sent to America to supervise the reorganization of the Northern 
Pacific Railway by its European creditors; and while he was 
in the United States, he formed lasting friendships with J. Pier- 
pont Morgan and James J. Hill. In 1901 he succeeded Dr. von 
Siemens as the guiding spirit of the Deutsche Bank, which under 
his administration made even more remarkable progress than 
under his capable predecessor. As managing director of the 
Deutsche Bank he became president of the Anatolian and Bagdad 


PEACEFUL PENETRATION PROGRESSES 115 

Railway Companies. It was in 1909 that Dr. von Gwinner’s 
father received from the Kaiser the patent of hereditary nobility 
—an honor said to have been intended as much for the distin¬ 
guished son as for the distinguished sire. Intellectually, Dr. von 
Gwinner is an international man: he quotes Dickens and Shake¬ 
speare and Moliere, Goethe and Schiller and Lessing, with almost 
equal facility. His delightful personality stands out in all the 
Bagdad Railway negotiations. 

a Infra, Chapter IX. The French bankers also shared in the 
ownership of the construction company. A. Geraud, “A New 
German Empire: the Story of the Bagdad Railway,” in The 
Nineteenth Century, Volume 75 (1914), p. 967; Report of the 
Bagdad Railway Company, 1903, pp. 4, 8. 

'Among the German members were Dr. von Gwinner; Dr. 
Karl Testa, representative of the German bondholders on the 
Ottoman Public Debt Administration; Dr. Alfred von Kaulla, a 
director of the Wurttembcrgische Vereinsbank, and original con¬ 
cessionaire of the Anatolian Railways; Dr. Karl Schrader, a 
member of the Reichstag; Dr. Kurt Zander, general manager 
of the Anatolian Railway Company. The directors nominated by 
the French interests were Count A. D’Arnoux, Director General, 
and M. Leon Berger, French member, of the Ottoman Public 
Debt Administration; MM. J. Defies, G. Auboyneau, P. Naville, 
Pangiri Bey, and A. Vernes, of the Imperial Ottoman Bank, the 
last-named being vice-president of the Bagdad Railway Com¬ 
pany ; M. L. Chenut, a member of the Ottoman Regie Generate de 
chemins de fer. The Turkish members of the Board were 
Hamdy Bey, representative of the Ottoman bondholders on the 
Public Debt Administration; Hoene Effendi, under-secretary in 
the Ministry of Posts and Telegraphs; and two Constantinople 
bankers. The Swiss were Herr Abegg-Arter, president of the 
Schweizerische Kreditanstalt, of Zurich, and M. A. Turrettini, 
of L’Union financiere de Geneve. The Austrian was Herr Bauer, 
of the Wiener Bankverein, and the Italian was Carlo Esterle, 
of the Italian Edison Electric Company, of Milan. There were 
few important changes in the personnel of the Board of Directors 
between 1903 and 1914, perhaps the most notable being the elec¬ 
tion of Dr. Karl Helfferich, in 1906. Cf. Reports of the Bagdad 
Railway Company, 1903, et seq. 

* Cf. Parliamentary Debates, House of Commons, fourth series, 
Volume 120 (1903), p. 1371. During the Great War a conspicu¬ 
ous German general complained that the Swiss in charge of the 
operation of the Railway was more interested in the commercial 
than in the strategic value of the line and did not cooperate with 
the military authorities. Cf. Field Marshal Liman von Sanders, 
Fiinf Jahre Tiirkei (Berlin, 1919), p. 4°- 


ii6 


THE BAGDAD RAILWAY 


* Verhandlungen des Reichstages, Stenographische Berichte, 
XII Legislaturperiode, i Session, Volume 231 (1908), p. 4 2 53 c> 

6 Supra, p. 77. 

7 Paul Imbert, “Le chemin de fer de Bagdad,” in Revue des 
deux tnondes, Volume 197 ( I 9°7)> P* 672. The Deutsche Bank, 
with its capital and surplus of about $75,000,000, was the fore¬ 
most of the German banks. Associated with it in the Bagdad 
Railway enterprise were a number of other financial institutions, 
including, it is said, the Dresdner Bank and the Darmstadter 
Bank, ranking second and fourth respectively among the great 
banks of the German Empire. Riesser, op. cit., pp. 642-644. 

# Supra, Chapter IV, Note 48; Fraser, op. cit., pp. 48-49; 
Jastrow, op. cit., p. 94; Report of the Bagdad Railway Company, 

1904, P- 3; 1905, P- 4- 

8 Von Gwinner, loc. cit., p. 1088. 

10 Corps de droit ottoman, Volume III, pp. 221-228. 

u Turkey in Europe, pp. 128-129; The Quarterly Review, 
Volume 228 (1917), pp. 510-511; Parliamentary Debates, House 
of Commons, fourth series, Volume 159 (1906), pp. 1338, 1359 J 
ibid., Volume 162 (1906), p. 1419; Volume 178 (1907), p. 3 21 J 
ibid., fifth series, Volume 53 (1913), P- 368. 

12 Societe Imperiale Ottomane du Chemin de fer de Bagdad — 
Convention Additionelle (Constantinople, 1908) ; Parliamentary 
Papers, No. Cd. 5636, Volume CIII (1911) ; Report of the 
Bagdad Railway Company, 1908, pp. 4-5; 1909, P- 4 \ Bagdad Rail¬ 
way Loan Contract, Second and Third Series, June 2, 1908; 
Report of the Deutsche Bank, 1909, p. 12. 

“ Report of the Deutsche Bank, 1909, p. 12. 

14 Report of the Bagdad Railway Company, 1906, p. 4; K. Helf- 
ferich, Die Vorgeschichte des Weltkrieges, pp. 131-132; Dr. 
Helfferich’s reputation was based largely upon his writings on 
two important subjects: the gold monetary standard; govern¬ 
ment promotion of foreign trade. Cf. Germany and the Gold 
Standard (London, 1896) ; Beitrdge zur Geschichte der deutschen 
Geldreform (Leipzig, 1901). See the enthusiastic appreciation 
of Dr. Helfferich’s services voiced by his associates of the 
Deutsche Bank upon the occasion of his appointment as Secre¬ 
tary of State for the Imperial Treasury, January, 1915. Re¬ 
port of the Deutsche Bank, 1915, pp. 11-12; Report of the 
Bagdad Railway Company, 1914, p. 8. 

15 The Times, October 25, 1905, commenting upon the proposed 
appointment of Helfferich. 

19 Report of the Anatolian Railway Company, 1907, p. 7; H. C. 
Woods, “The Bagdad Railway and Its Tributaries,” in The Geo¬ 
graphical Journal, Volume 50 (1917), pp. 32 et seq.; Parlia¬ 
mentary Papers, No. Cmd. 964 (1920). The irrigation system 


PEACEFUL PENETRATION PROGRESSES n7 

thus planned was completed before the outbreak of the Great 
War. It justified the sanguine expectations of its promoters, 
for the agricultural yield of the irrigated lands increased from 
five to fifteen fold over the former production. In 1911 a similar 
irrigation project was gotten under way in Cilicia. Diplomatic 
and Consular Reports, No. 4835 (1911), pp. 18-19. 

17 Cf. supra, p. 37. 

18 Riesser, op. cit., p. 454; Report of the Dresdner Bank, 1905, 
p. 6; Diplomatic and Consular Reports, No. 3553 (1905), p. 29; 
Report of the Deutsche Bank, 1908, p. 10. The Bagdad office of 
the Deutsche Bank was not established until 1914, just before 
the outbreak of the War. Ibid., 1914, p. 9. 

19 The principal bank in Turkey before the War was the Im¬ 
perial Ottoman Bank. This institution was owned by French 
and British capitalists, the French interest being predominant 
and in control. It was a quasi-public bank, founded in 1863, 
and enjoying since then a monopoly of bank-note issues. Its 
central office was at Constantinople, but it maintained a branch 
in practically every important city of Asiatic Turkey, including 
Smyrna, Jerusalem, Jaffa, Aleppo, Alexandretta, Beirut, Damas¬ 
cus, Basra, Bagdad, and Mosul. The capital stock of the Im¬ 
perial Ottoman Bank was £10,000,000 sterling. A British bank 
of some importance was The Eastern Bank, Ltd., of which the 
Right Honorable Lord Balfour of Burleigh was chairman—the 
same Lord Balfour who was Secretary for Scotland in the 
ministry of his namesake, Arthur J. Balfour, in 1903, when the 
British Government quashed the participation of English capital¬ 
ists in the Bagdad Railway. The head office of the Eastern 
Bank was in London, and it maintained branches in Basra and 
Bagdad, although its principal sphere of activity was India. Sir 
Ernest Cassell’s National Bank of Turkey was not established 
until 1909. Cf. Caillard, loc. cit., p. 439; weekly advertisements 
of these banks in The Near East; Parliamentary Debates, Index 
for 1903, p. v; Turkey in Europe, p. 36. 

20 D. S. Jordan, “The Interlocking Directorates of War,” in 
The World’s Work, July, 1913, p. 278; H. Hauser, Les Methodes 
Allemandes d’Expansion Economique, seventh edition (Paris, 
1917), passim; Riesser, op. cit., pp. 366-367. 

21 Riesser, op. cit., pp. 373 - 375 , 432 , 474, 745 - 746 . 

22 Verhandlungen des Reichstages,Stenographische Berichte, XII 
Legislaturperiode, 1 Session, Volume 231 (1908), p. 4253c. The 
speech of the Secretary was followed by “Bravos” from the 
National Liberals. 

23 Parliamentary Debates, House of Lords, fourth series, 
Volume 121 (1903), P- 1340 . 

24 Diplomatic and Consular Reports, No. 3140 ( I 9 ° 3 )» P* 40. 


n8 


THE BAGDAD RAILWAY 


26 Supra, pp. 98-99, Report of the Deutsche Bank, 1909, p. 12; 
Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 260 (1910), p. 2i8id, statement by Baron von Schoen. 

"Fraser, op. cit., pp. 16-17, 18-20. Cf., also, Report of the 
Bagdad Railway Company, 1911, p. 4. 

31 Staatsburger Zeitung (Berlin), March 3, 1912. 

38 Compiled from the Statistisches Jahrbuch fiir das deutsche 
Reich, 1900-1914, as corrected for 1900-1905 according to the 
Statistisches Handbuch fiir das deutsche Reich, Volume 2, pp. 
506-510. A remarkable increase of German exports to Turkey— 
an increase of 50%—is to be noted in the year 1904, during 
which the first section of the Bagdad Railway was constructed. 
Undoubtedly this increase is to be partially accounted for by the 
purchase in Germany of materials for right of way as well as 
rolling stock for the railway. This factor should not be over¬ 
estimated, however, as a glance at the following tables will show 
that imports into Turkey from other European countries during 
the same year likewise showed increases, without exception. 
The general falling off in trade during 1908 may be attributed, 
in part, at any rate, to the Young Turk Revolution of that 
year. 

38 Compiled from Diplomatic and Consular Reports, Nos. 2950 
(1902), 3533 (1905), 4188 (1908), and 4835 (1910-1911). 

80 Supra, p. 36. 

81 Diplomatic and Consular Reports, No. 3533 (1905), p. 27; 
Turkey in Europe, pp. 86-87. 

82 Mesopotamia, pp. 99-101; Schaefer, op. cit., p. 22. Regard¬ 
ing British interests in the Persian Gulf, cf., a detailed state¬ 
ment by Lord Lansdowne to the House of Lords, May 5, 1903. 
Parliamentary Debates, House of Lords, fourth series, Volume 
121 (1903), PP- 1347 - 1348 . 

33 “Bagdad: Handelsbericht des kaiserlichen Konsulats fiir das 
Jahr 1908-1909,” in Deutsches Handels-Archiv, 1910, part 2, pp. 
27-35; also, “Bericht fiber den Handel in Basra und Bagdad fiir 
das Jahr 1910,” ibid., 1912, part 2, pp. 263-270; Mesopotamia, p. 
108. 

34 Cf. supra, pp. 59-60; Report of the Bagdad Railway Company, 
1906, p. 4, 1908, pp. 7-8; Diplomatic and Consular Reports, No. 
3533 0905 ), p. 29. The Mersina-Adana line was formally incor¬ 
porated in the Bagdad system in 1908. Cf. Deuxieme convention 
additionelle & la convention du chemin de fer de Bagdad (Con¬ 
stantinople, 1910). 

85 Parliamentary Debates, House of Commons, fifth series, 
Volume 22 (1911), pp. 1284-1285. 

89 Quatrieme convention additionelle a la convention du 5 Mars, 
I 9 ° 3 > relative au chemin de fer de Bagdad (Constantinople, 1911). 


PEACEFUL PENETRATION PROGRESSES 119 


H. F. B. Lynch (of the firm of Lynch Brothers), “The Bagdad 
Railway: the New Conventions,” in the Fortnightly Review, new 
series, Volume 89 (1911), pp. 773-780. Mr. Lynch explains that 
his summary of the Alexandretta port concessions is based upon 
an authentic article appearing in La Turquie, a Constantinople 
newspaper, of March 21, 1911. Diplomatic and Consular Reports, 
No. 4835 (1911), p. 16; The Times (London), March 23, 1911. 

37 Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 266 (1911), pp. 5984c et seq.; Troisieme convention addi- 
tionelle d la convention du 5 Mars, 1903, relative au chemin de 
fer de Bagdad (Constantinople, 1911) ; Parliamentary Debates, 
House of Common, fifth series, Volume 23 (1911), pp. 582-583, 
statement by Sir Edward Grey. 

38 See speeches of Herr Scheidemann and Herr Bassermann 
before the Reichstag, March 30, 1911. Stenographische Berichte, 
XII Legislaturperiode, 2 Session, Volume 266 (1911), pp. 5980 
et seq. 

89 Parliamentary Debates, House of Lords, fifth series, Volume 
23 (1911), p. 589. 

40 D. Chatir, “L’fitat actuel du chemin de fer de Bagdad,” in 
Questions diplomatiques et coloniales, Volume 36 (1913), pp. 279- 
281; Report of the Bagdad Railway Company, 1910, p. 4, 1911, 
p. 4, 1913, pp. 3-5, 1914, pp. 6-8. 

41 Report of the Deutsche Bank, 1913, pp. 11-12. 

42 Report of the Bagdad Railway Company, 1914, pp. 6-8. It 
was not until September, 1918, that the Amanus tunnels were 
completed, the first train being operated through to Aleppo just 
before the capture of that city by Lord Allenby’s army. Von 
Sanders, op. cit., p. 42. 


CHAPTER VI 


f 




THE BAGDAD RAILWAY BECOMES AN 
IMPERIAL ENTERPRISE 

Political Interests Come to the Fore 

It was asserted times without number that the Bagdad 
Railway was an independent financial enterprise, uncon¬ 
nected with the political aims of the German Government 
in Turkey and in no sense associated with an imperialist 
policy in the Near East. At the time the concession of 
1903 was granted Dr. Rohrbach expressed the belief that 
political and diplomatic considerations were quite outside 
the plans and purposes of the promoters of the Railway. 1 
Herr Bassermann, leader of the National Liberal Party, 
announced to the Reichstag that, although German capital 
was predominant in the Railway, there was no intent on 
the part of the owners or on the part of the Government 
to build with any political arriere-pensee. Baron von 
Schoen, Imperial Secretary for Foreign Affairs, reiterated 
this idea with emphasis. He pointed out that the Bagdad 
convention of 1903 was not a treaty between Germany 
and Turkey, but a contract between the Ottoman Govern¬ 
ment and the Anatolian Railway Company. He maintained 
that if the railway were considered, properly, as a purely 
economic enterprise, “all the fantastic schemes that are 
from time to time being attached to it would evaporate.” 2 
A British journalist wrote in 1913: “Gwinner, it may be 
assumed, is not building the Bagdad Railway for the pur¬ 
poses of the German General Staff. What chiefly keeps 
him awake of nights is how to extract dividends from it 

120 


AN IMPERIAL ENTERPRISE 


121 


for the Deutsche Bank and how best to promote the golden 
opportunities which await the strategists of the German 
trading army in the Near East.” 3 

The German Government, nevertheless, had been in¬ 
terested in the Bagdad plan almost from its inception. 
The visits of the Emperor to Constantinople and Palestine; 
the appointment of German military and consular officers 
to the technical commission which surveyed the line in 
1899; the enthusiastic support of the German ambassador 
all contributed to the success of the enterprise. In fact, 
the German Government was almost too solicitous of the 
welfare of the concessionaires; assistance, it was said, 
bordered upon interference. During the early stages of 
the negotiations of 1898-1899 Dr. von Siemens com¬ 
plained that the German embassy was jeopardizing the 
success of the project by insisting that the issuance of the 
concessions should be considered a diplomatic, as well as 
a business, triumph. Dr. von Gwinner, also, was discon¬ 
tented with the tendency of the German Government to 
urge strategic, rather than purely economic, considera¬ 
tions. There was a widespread belief in Germany, as 
well as elsewhere in Europe, that the Imperial Foreign 
Office nurtured the Bagdad Railway and its affiliated enter¬ 
prises with a full realization that “the skirmishes of the 
political advance guard are fought on financial ground, 
although the selection of the time and the enemy, as well 
as the manner in which these skirmishes are to be fought, 
depends upon those responsible for our foreign policy. 
Much more than ever before Germans will have to bear in 
mind that industrial contracts, commercial enterprises, and 
capital investments are conveying from one country to 
another not only capital and labor, but also political in¬ 
fluence.” 4 

Had the German Government been disposed to pursue 
a different policy in the Near East, had it refused to link 


122 


THE BAGDAD RAILWAY 


its political power with the economic interests of its na¬ 
tionals, it would have been standing out against an ac¬ 
cepted practice of the Great Powers. Lord Lansdowne, 
British Secretary of State for Foreign Affairs, informed 
the House of Lords, in May, 1903, that it was impossible 
for the Foreign Office to dissociate commercial and po¬ 
litical interests. He doubted whether British success in 
the Middle and Far East could have been achieved with¬ 
out careful diplomatic promotion of British economic in¬ 
terests in those regions. 5 Through financial control Russia 
and Great Britain effectually throttled Persian reform 
and nationalist aspirations. The pioneer activities of 
French capital in Tunis and Morocco are outstanding in¬ 
stances of modern imperial procedure. Such also is the use 
by the Government of the French Republic of its power 
to deny listings on the Paris Bourse for the purpose of 
forcing political concessions—a procedure which a French 
banker described to the author as “a species of inter¬ 
national blackmail.” 6 A prominent historian and economist 
has described the Franco-Russian alliance as a “bankers’ 
creation.” 7 What other powers had been doing it was to 
be expected that Germany would do. The ownership and 
operation of the Bagdad Railway by a predominantly Ger¬ 
man company was an important factor in a notable ex¬ 
pansion of German commercial and financial activities in 
the Near East. In an age of keen competition for eco¬ 
nomic influence in the so-called backward areas of the 
world, this growth of German interests in Turkey was 
almost certain to influence the diplomatic policy of Ger¬ 
many toward the Ottoman Empire. The political aspira¬ 
tions of the diplomatists were reenforced by the economic 
interests of the bankers. 

Had the German Government not voluntarily taken the 
Bagdad enterprise under its wing, it might have been com¬ 
pelled to do so. Popular dissatisfaction with a “weak” 


AN IMPERIAL ENTERPRISE 


123 


policy toward investments in backward countries may 
force the hand of an unwilling government. Whether 
this dissatisfaction be spontaneous or created by an in¬ 
terested press or both, it is certain to be powerful, for 
there are few governments which can resist for long the 
clamor for vigorous fostering of the nation’s interests and 
rights abroad. And there was no lack of popular en¬ 
thusiasm in Germany for the Bagdad Railway. The fact 
that French capital had been invested in the undertaking 
was usually forgotten. The grand design came to be re¬ 
ferred to, affectionately, as unser Bagdad and, somewhat 
flamboyantly, as the “B. B. B.” (Berlin-Byzantium-Bag- 
dad). German publicists of imperial inclinations contem¬ 
plated the Railway with reverent amazement, as though 
hypnotized. The project speedily became an integral part 
of the national Weltanschauung —a means of enabling 
Germans to compete for the rich commerce of the Orient, 
to appropriate some of its enormous wealth, to develop 
some of its apparently boundless possibilities. As a branch 
of Weltpolitik it held out alluring inducements for the 
exercise of political influence in the East—an influence 
which would serve at once to discomfit the Continental 
rivals of Germany and to promote the Drang nach Osten 
of her Habsburg ally. 

The political aims of the German Empire in Turkey, 
however, were not concerned with colonization or conquest. 
It was not proposed, for example, to encourage German 
colonization of the regions traversed by the Bagdad Rail¬ 
way. During the last two decades of the nineteenth century, 
it is true, attempts had been made to stimulate German 
settlements in Syria and Mesopotamia. But later, when 
the problem of German oversea migration had become 
less acute, all proposals for German colonization in the 
Near East were abandoned. 8 

The difficulties in the way of European settlement of 


124 


THE BAGDAD RAILWAY 


Asiatic Turkey were almost insurmountable. Mesopotamia 
is unbearably hot during the summer and is totally unfit 
for colonization by Europeans. During July and August 
the thermometer registers between ioo and 120 almost 
every day, and the heat is particularly oppressive because 
of the relatively high humidity. The total number of 
Europeans resident in Mesopotamia before the War was 
not in excess of 200, who were almost all missionaries, 
engineers, consuls, or archaeologists. Palestine is more 
suitable as a place of residence, but the country is not 
particularly alluring; a few German agricultural colonies, 
chiefly Jewish, were established there, but they were com¬ 
paratively unimportant in size, wealth, and political in¬ 
fluence. In Anatolia the climate is tolerable, but not 
healthful for western Europeans. The plateau is subject 
to sudden and extreme changes in temperature in both 
winter and summer, and, consequently, pneumonia and 
malaria are almost epidemic among foreigners. To the 
German who was considering leaving the Fatherland to 
seek his fortune abroad, Mesopotamia, Syria, and Ana¬ 
tolia were by no means as attractive as Wisconsin, Minne¬ 
sota, and the Dakotas. Turkey offered few inducements 
to compare with the lure of the United States or of South 
America. 9 

In addition to these natural difficulties, there existed 
the pronounced opposition of the Turks to foreign coloni¬ 
zation of their homeland. This opposition was so deep- 
rooted that General von der Goltz warned his fellow 
countrymen not to migrate to the Near East if friendly 
relations were to be maintained with the Ottoman Empire. 
Paul Rohrbach said that colonization of Turkey-in-Asia 
by Europeans was quite out of the question. H. F. B. 
Lynch, of the English firm of Lynch Brothers, one of the 
most pronounced opponents of the Bagdad Railway, de¬ 
clared that fear of German settlement of Asia Minor was 


AN IMPERIAL ENTERPRISE 


125 


sheer nonsense, that no such plan was in contemplation 
by the promoters of the Bagdad enterprise, and that the 
reports of such intentions were the work of ignorant chau¬ 
vinists. It will be recalled, also, that a secret annex to the 
concession of 1903 pledged the Deutsche Bank not to en¬ 
courage' German or other foreign immigration into 
Turkey. 10 

Germans denied, likewise, that they had any intention 
of utilizing the Bagdad Railway as a means of acquiring 
an exclusive sphere of economic interest in the Ottoman 
Empire. Attention was continually directed to Articles 
24 and 25 of the Specifications of 1903, which decreed 
that rates must be applicable to all travelers and consignors 
without discrimination, and which prohibited the conces¬ 
sionaires from entering into any contract whatever with 
the object of granting preferential treatment to any one. 
Arthur von Gwinner, President of the Bagdad Railway, 
stated that his company had loyally abided by its announced 
policy of equality of treatment for all, regardless of na¬ 
tionality or other considerations, and he challenged the 
critics of the enterprise to cite a single instance in which 
the contrary had been the case. Dr. Rohrbach wrote, in 
1903, that it was “unthinkable that Germans should seek 
to monopolize the territories of the Turkish Empire for 
the purposes of economic exploitation.” Somewhat later 
he again stressed this point: “Germany’s political attitude 
to Turkey is unlike that of all other European powers be¬ 
cause, in all sincerity, we ask not a single foot of Turkish 
territory in Europe, Asia, or Africa, but have only the 
wish and the interest to find in Turkey—whether its domi¬ 
nation be in future restricted to Asia or not—a market 
and a source of raw materials for our industry; and in 
this respect we advance no claim on other nations than 
that of the unconditional open door.” Baron von Schoen 
pledged the Government to a policy of equal and unquali- 


126 


THE BAGDAD RAILWAY 


fied opportunity for all in the regions to be opened up 
by the Railway. 11 

Furthermore, there is little reason to believe that the 
Germans had any intention of establishing a protectorate 
over Asiatic Turkey. Their determination to respect the 
territorial integrity of the Ottoman Empire was due, of 
course, not to magnanimity on their part as much as to 
expediency. Protectorates are expensive. For the same 
reason it may be doubted that there was any intention of 
maintaining an extensive military control over Turkey. 
German aims were to be served by the economic, military, 
and political renaissance of Turkey-in-Asia. A strong 
Turkey economically would be a Turkey so much the 
better able to increase the production of raw materials for 
the German market as well as to provide an ever more 
prosperous market for the products of German factories. 
A powerful Turkish military machine might strike some 
telling blows, in alliance with German arms, in a general 
European war; in the event of a Near Eastern conflict it 
might be utilized to menace the southern frontier of Russia 
or to strike at British communications with India. A 
politically strong Ottoman Empire might offer serious 
resistance to the Russian advance in the Middle East and 
might menace Britain’s hold on her Mohammedan pos¬ 
sessions. 

On the other hand, a Turkey in subjection would be an 
unwilling producer and a poor customer. The occupation 
of Turkey by German armed forces would seriously de¬ 
plete the ranks of the German armies on the Russian and 
French frontiers, and in time of war would confront the 
German General Staff with the additional problem of main¬ 
taining order in hostile Mohammedan territory. The 
conquering of Turkey would bring the German Empire 
into the ranks of European powers with Mohammedan 
subjects, thus exposing it to the menace, common to Great 


AN IMPERIAL ENTERPRISE 


127 

Britain, France, and Russia, of a Pan-Islamic revival. 
For all of these reasons the obvious German policy was 
not only to respect the territorial integrity of Turkey, 
but to defend it against the encroachments of other 
powers. “Not a penny for a weak Turkey,” said Rohr- 
bach, “but for a strong Turkey everything we can give!” 12 
In its political aspects the Bagdad Railway was some¬ 
thing more than a railway. It was one phase of the great 
diplomatic struggle for the predominance of power, one 
pawn in the great game between the Alliance and the 
Entente, one element of the Anglo-German rivalry on the 
seas. The development of closer relations, political and 
economic, between Germany and Turkey was in accord 
with the spirit of an era of universal preparedness—pre¬ 
paredness for pressing economic competition, preparedness 
for the expected great European war in which every nation 
would be obliged to fight for its very existence. Through 
control of the economic resources of the Ottoman Empire, 
German diplomacy sought to arrive at an entente cordiale 
or a formal military alliance with the Sultan. Through 
support of the chief Mohammedan power Germany might 
throw tempting “apples of discord” into the colonial em¬ 
pires of her chief European rivals, for Great Britain ruled 
about eighty-five million subject Mohammedans, Russia 
about seventeen million, France about fifteen million; but 
Germany possessed almost none. 13 Friedrich Naumann 
wrote in 1889, in connection with the Kaiser’s pilgrimage to 
the Near East: “It is possible that the world war will break 
out before the disintegration of the Ottoman Empire. 
Then the Caliph of Constantinople will once more uplift 
the standard of the Holy War. The Sick Man will raise 
himself for the last time to shout to Egypt, the Soudan, 
East Africa, Persia, Afghanistan, and India, ‘War against 
England.’ It is not unimportant to know who will support 
him on his bed when he utters this cry.” 14 


128 


THE BAGDAD RAILWAY 


This menace to the British Empire was no more serious 
than another which was frankly espoused by certain sup¬ 
porters of the Bagdad plan—the possibility, even without 
a preponderance of naval power, of severing the com¬ 
munications of the empire in time of war. Dr. Rohrbach, 
for example, put it this way: “If it comes to war with 
England, it will be for Germany simply a question of life 
and death. The possibility that events may turn out 
favorably for us depends wholly and solely upon whether 
we can succeed in putting England herself in a precarious 
position. That cannot be done by a direct attack in the 
North Sea; all idea of invading England is purely chi¬ 
merical. We must, therefore, seek other means which 
will enable us to strike England in a vulnerable spot. . . . 
England can be attacked and mortally wounded by land 
from Europe in only one place—Egypt. The loss of Egypt 
would mean not only the end of her dominion over the 
Suez Canal and of her communications with India and the 
Far East, but would probably entail, also, the loss of her 
possessions in Central and East Africa. We can never 
dream, however, of attacking Egypt until Turkey is mis¬ 
tress of a developed railway system in Asia Minor and 
Syria, and until, through the extension of the Anatolian 
Railway to Bagdad, she is in a position to withstand an 
attack by England upon Mesopotamia. . . . The stronger 
Turkey grows the more dangerous does she become for 
England.” 15 

It is only fair to add, however, that Dr. Rohrbach was 
not an authorized spokesman of the German people, the 
German Government, or the Bagdad Railway Company. 
His views were personal and are to be given weight only 
in so far as they influenced or reflected public opinion in 
Germany; to estimate their importance by such a standard 
is no simple task. But whatever its true significance, Dr. 
Rohrbach’s interest in the Bagdad Railway was certainly 


AN IMPERIAL ENTERPRISE 


129 


a source of great annoyance to Dr. von Gwinner, who was 
constantly called upon to explain irresponsible, provoca¬ 
tive, and bombastic statements from Rohrbach’s pen. It 
is well to recall that the writings of publicists are some¬ 
times taken too seriously . 16 

It would have been foolhardy, nevertheless, to discard 
these possibilities as purely imaginary. Once the Bagdad 
Railway was constructed and its subsidiary enterprises 
developed, there would have existed the great temptation 
to utilize economic influence for the promotion of strategic 
and diplomatic purposes. In an era of intensive military 
and economic preparedness for war the observance of the 
niceties of international relationships is not always to be 
counted upon. In such circumstances the wishes of 
the business men—whether they were imperialistic or anti- 
imperialistic—may be over-ruled by the statesmen and 
the soldiers. The chance to strike telling blows at French 
prestige in the Levant; the opportunity to embarrass 
Russia by strengthening Turkey; the possibility of men¬ 
acing the communications of the British Empire; the 
likelihood of recruiting Turkish military and economic 
strength in the cause of Germany,—these were alluring 
prospects for discomfiting the Entente rivals of the Ger¬ 
man Empire. 

At the same time it should be mentioned that promotion 
of the Bagdad Railway would serve to weld firmer the 
Austro-German alliance. Austrian ambitions in the Near 
East centered in the Vienna-Salonica railway and were 
distinct from the Berlin-to-Bagdad plan of the Germans; 
nevertheless circumstances served to promote a com¬ 
munity of interest. First, the routes of the railways 
through the Balkans coincided in part: the Austrian rail¬ 
way ran via Belgrade and Nish to Salonica; traffic “from 
Berlin to Bagdad” followed tjie same line to Nish, where 
it branched off to Sofia and Constantinople. Second, 


130 


THE BAGDAD RAILWAY 


Austrian, as well as German, trade would be carried over 
the Bagdad lines to the Orient, and Austrian industries 
would be able to secure raw materials from Anatolia and 
Mesopotamia. If the railway was to run from Berlin to 
Bagdad, it also was to run from Vienna to Bagdad. Third, 
similarly, German industry was to profit by the Austrian 
railway to Salonica, for it opened a new route to German 
commerce to the Aegean. “Germany’s road to the Orient 
lay, literally as well as figuratively, across the Balkan 
Peninsula.” 17 The Drang nach Osten was near to the 
hearts of both allies ! 

It was not without warning that the German nation per¬ 
mitted itself to be drawn into the imperial ramifications 
of the Bagdad Railway. Anti-imperialists sensed the 
dangers connected with such an ambitious project. Herr 
Scheidemann, leader of the Social Democrats in the 
Reichstag, for example, warned the German people that 
the railway was certain to raise increasingly troublesome 
international difficulties, and he expressed the fear that 
the German protagonists of the plan would come to em¬ 
phasize more and more its political and military, rather 
than its economic and cultural, phases . 18 Karl Radek, also 
a Socialist, wrote that “The Bagdad Railway possessed 
great political significance from the very moment the plan 
was conceived.” He prophesied that German economic 
penetration in Turkey would prove to be only the first 
step toward a formal military alliance, which, in turn, 
would heighten the fear and animosity of the Entente 
Powers. “The Bagdad Railway,” he said, “constitutes 
the first great triumph of German capitalistic imperial¬ 
ism.” 19 Business men and politicians of imperialist in¬ 
clinations did not deny the charges of their pacifist op¬ 
ponents. Herr Bassermann, so far from deprecating a 
greater political influence in the Ottoman Empire, came 
to glory in it. Baron von Schoen qualified his earlier 


AN IMPERIAL ENTERPRISE 


131 

statements with the following enunciation of policy: “With 
reference to the attitude of the Imperial Government, it 
goes without saying that we are giving the enterprise our 
full interest and attention and will make every effort to 
further it.” 20 

The political potentialities of the Bagdad Railway 
aroused the fear and opposition of the other European 
Powers. Exaggerated charges were made as to the inten¬ 
tions of the German promoters and the German Govern¬ 
ment, and there was a widespread feeling that there was 
something sinister about the plan. Professor Sarolea 
sounded a prophetic warning when he wrote, “The trans- 
Mesopotamian Railway . . . will play in the Near East 
the same ominous part which the Trans-Siberian played 
in the Far East; with this important difference, however, 
that whilst the Far Eastern conflict involved only one 
European Power and one Asiatic Power, the Near Eastern 
conflict, if it breaks out, must needs involve all the Eu¬ 
ropean powers, must force the whole Eastern Question to 
a crisis, and once begun, cannot be terminated until the 
map of Europe and Asia shall be reconstructed.” 21 

Religious and Cultural Interests Reenforce 
Political and Economic Motives 

Along with economic and political motives for im¬ 
perialist ventures there frequently goes a religious motive. 
That such should be the case in the Near East was to be 
expected because of the religious appeal of the Ottoman 
Empire as the homeland of the Jews, the birthplace of 
Christianity, the cradle of Mohammedanism. It was 
small wonder, then, that the Bagdad Railway, which prom¬ 
ised to link Central European cities with the holy places 
of Syria and Palestine, should have been supported 
enthusiastically by German missionaries and other Ger¬ 
man Christians. 


I 3 2 


THE BAGDAD RAILWAY 


German Protestant missions were represented in the 
Holy Land as early as i860, when the Kaiserswerth Dea¬ 
conesses established themselves in Jerusalem. Shortly 
thereafter the J erusalems-V ercin began work in Jerusalem 
and Bethlehem, and about this same time, 1869, Lutheran 
missionaries calling themselves Templars settled near 
Jaffa. Under William II additional impetus was given 
to German religious activities in the Near East. The 
Jerusalems-Verein, which was taken under the special 
patronage of the Kaiserin Auguste Victoria, supported a 
Lutheran clergyman in Jerusalem and was responsible for 
the erection in the Holy City of the Church of the Re¬ 
deemer. This same society rapidly spread its activities 
throughout all of Palestine, and in 1910 it dedicated the 
famous Kaiserin Auguste Victoria Stiftung 22 erected on 
the Mount of Olives by the Hohenzollern family at a 
cost in excess of half a million dollars. The Evangelical 
Union, organized in 1896, established a large orphanage 
in Jerusalem, together with schools and related institutions, 
and proved to be a very useful auxiliary to the work of 
the Deaconesses in maintaining schools, dispensaries, 
and hospitals. Also in 1896 there was founded the 
Deutsche Orient Mission, which rendered its services par¬ 
ticularly in Cilicia, and which kept up the interest of its 
supporters at home by the publication in Berlin of a 
monthly periodical, Der Christliche Orient. It was esti¬ 
mated that, during the early years of the twentieth century, 
the German Protestant societies maintained in Turkey-in- 
Asia about 450 missionaries and several hundred native 
assistants at a cost of hundreds of thousands of dollars. 
By 1910 the Germans occupied a conspicuous position in 
evangelical missions in the Near East. 23 

The German Catholics were no less zealous than their 
Protestant compatriots. Although for centuries Italian 
and French members of the Franciscan order had been 


AN IMPERIAL ENTERPRISE 


133 


preeminent in Catholic missions in Turkey, there was a 
marked tendency during the last decade of the nineteenth 
century and the first decade of the twentieth for German 
members of other religious orders to take an interest in 
the Near East. This may have been merely the result of 
a general increase in missionary activity connected with 
the increasing imperial activities of the German Govern¬ 
ment. It may have been due to the announced intention 
of the German Foreign Office to protect Christian mis¬ 
sions and missionaries and to the vigorous fulfilment of 
that promise after the murder of two German Catholic 
priests in the Chinese province of Shantung. It may have 
been a natural consequence of the fact that the Prefect of 
the Propaganda from 1892-1902 was a famous German 
cardinal. 24 In any event, under the guiding aegis of the 
Palastinaverein, a society for the promotion of Catholic 
missions in the Holy Land, German Lazarists, Benedic¬ 
tines, and Carmelites established and maintained schools, 
hospitals, and dispensaries, as well as churches, in Syria 
and Palestine. 25 

Even Jewish religious interests in Palestine promoted 
Teutonic peaceful penetration in Turkey. As part of the 
Zionist activities of U Alliance Israelite Universelle, agri¬ 
cultural colonies were founded by German Jews in the 
vicinity of Jaffa, Jerusalem, and Haifa. These colonists 
appeared to be proud of their German nationality and were 
an integral part of the German community in the Holy 
Land. 26 

The German Government had no intention of overlook¬ 
ing the political possibilities of this religious penetration. 
Promotion of missionary activities might be made to serve 
a twofold purpose: first, to win the support, in domestic' 
politics, of those interested in the propagation of their 
faith in foreign lands—more particularly to hold the loyalty 
of the Catholic Centre party; second, to further one other 


134 


THE BAGDAD RAILWAY 


means of strengthening the bonds between Germany and 
the Ottoman Empire. 

An excellent illustration of the inter-relation among 
economic, political, and religious aspects of modern im¬ 
perialism is to be found in the visit of William II to 
Turkey in 1898. On the morning of October 31—the 
anniversary of the posting of Luther’s ninety-five theses 
at Wittenberg—the Emperor participated in the dedication 
of the Lutheran Church of the Redeemer in Jerusalem. 
During the afternoon of the same day he presented the 
supposed site of the Assumption of the Virgin Mary to 
the German Catholics of the Holy City, for the construc¬ 
tion thereon of a Catholic memorial church, and he tele¬ 
graphed the Pope expressing his hope that this might be 
but one step in a steady progress of Catholic Christianity 
in the Near East. The Kaiser likewise might have vis¬ 
ited the German Jewish communities in the vicinity of 
Jerusalem, but perhaps he felt, as a French writer put it, 
that such a visit “between his devotions at Gethsemane 
and at Calvary would have created a public scandal/’ 27 
Nevertheless he did not hesitate, a week later, at Damascus, 
to assure “three hundred million Mohammedans” that 
the German Emperor was their friend. Yet with all this 
pandering to religious interests—to the Protestants of 
Prussia, to the Catholics of South Germany, to his Mos¬ 
lem hosts—the Kaiser found time ostentatiously to pro¬ 
mote the German Consul at Constantinople to the rank 
of Consul General. And upon his return home he justi¬ 
fied all of these activities on the ground that his visit 
“would prove to be a lasting source of advantage to the 
German name and German national interests.” 28 

This curious admixture of religion and diplomacy was 
made the more complicated when the Imperial Chancellor 
informed the Reichstag, on December 7, 1898, that one of 
the purposes of the Emperor’s visit to His Ottoman 


AN IMPERIAL ENTERPRISE 


135 


Majesty was to make it plain that the German Government 
did not propose to recognize anywhere “a foreign pro¬ 
tectorate over German subjects.” This served notice to 
France that Germany would not respect the French 
claim to exclusive protection of Catholic missionaries in 
the Ottoman Empire. “We do not lay claim,” said Prince 
von Biilow, “to a protectorate over all Christians in the 
East. But only the German Emperor can protect German 
subjects, be they Catholics or Protestants.” 29 This pro¬ 
nouncement was received in France with undisguisedly 
poor grace. One writer in a prominent fortnightly maga¬ 
zine frankly expressed his disgust: “Germany possesses 
military power; she possesses economic power; she pro¬ 
poses to acquire maritime power. But she needs the sup¬ 
port of moral power. On the world’s stage she aspires to 
play the part of Principle. To base her world-wide prestige 
upon the protection of Christianity, Protestant and Catho¬ 
lic; to centralize the divergent sources of German influ¬ 
ence; to have all over the globe a band of followers, at 
once religious and economic in their interests, who will 
propagate the German idea, consume German products, 
and, while professing the gospel of Christ, will preach the 
gospel of the sacred person of the Emperor—these are 
the ultimate ends of the world policy of William II.” 30 
Closely allied with the spread of German missions was 
the propagation of das Deutschtum —that is, the spread 
of the German language, instruction in German history 
and ideals, appreciation of the character of German civi¬ 
lization. German religious schools in the Near East were 
dynamos of German cultural influence. The Jerusalems- 
Verein alone, for example, maintained, in 1902, eight 
schools with more than 430 pupils. In these schools Ger¬ 
man was taught. This also was the case with the Catholic 
schools, under German influence. Even the Jews—a large 
number of whom had emigrated from Germany because 


136 


THE BAGDAD RAILWAY 


of anti-Semitic feeling there—carried with them their Ger¬ 
man patriotism. The Hilfsverein der deutschen Juden, 
the German section of UAlliance Israelite Universelle, not 
only taught German in its own schools, but made a strenu¬ 
ous effort to have German adopted as the official language 
of all Zionist schools in the Near East. 31 

It should be pointed out that this injection of national¬ 
ism into religious education was an obvious imitation of 
the French method of spreading imperial influence in Syria 
and Palestine. And it was frankly admitted to be an 
imitation. “A policy of German-Turkish culture,” wrote 
Dr. Rohrbach, “deserves to be pressed with renewed ardor. 
We must endeavor to make the German language, and 
German science, and all the great positive values of our 
energetic civilization, duties faithfully fulfilled—active 
forces for the regeneration of Turkey by transplanting 
them into Turkey. To do this we need above everything 
else a system of German schools, which need not rival the 
French in magnitude, but which must be planned on a 
larger scale than that of the now existing schools. No 
lasting and secure cultural influences are possible with¬ 
out the connecting link of language. The intelligent and 
progressive young men of Turkey should have an abun¬ 
dant opportunity to learn German. . . . We can give the 
Turks an impression of our civilization and a desire to 
become familiar with it only when we teach them our lan¬ 
guage and thus open the door for them to all of our 
spiritual possessions. In doing this we are not aiming to 
Germanize Turkey politically or economically or to colo¬ 
nize it, but to introduce the German spirit into the great 
national process of development through which that nation, 
which has a great future, happens to be passing.” 32 French 
methods were to be paid the compliment of imitation. 

The sentimental appeal of the Bagdad Railway was 
more than a religious and cultural appeal alone. The 


AN IMPERIAL ENTERPRISE 


137 


Great Plan was assiduously promoted by a patriotic and 
Pan-German press. It caught the interest of the ordinary 
workaday citizen, whose imagination was fired by the 
sweeping references to “our” trade, “our” investments, 
“our” religious interests in the Near East; the Bagdad 
Railway was the very heart of all these interests. Here 
was a railway which was to revive a medieval trade route 
to the East, which was to traverse the route of the Cru¬ 
sades. Here was a country which had been the much- 
sought-after empire of the great nations of antiquity, 
Assyria, Chaldea, Babylon, Persia, Greece, Rome. Here 
had risen and fallen the great cities of Nineveh, Babylon, 
and Hit. To these regions had turned the longing of the 
great conquerors, Sargon, Sennacherib, Nebuchadnezzar, 
Alexander, Saladin. With such materials some German 
Kipling might evolve phrases far more alluring than Fuzzy 
Wuzzy, and Tommy Atkins, and the White Man’s 
Burden. 33 

Some Few Voices are Raised in Protest 

Not all Germans were dazzled by the Oriental glamor 
of the Bagdad Railway plan. Herr Scheidemann, leader 
of the Social Democrats in the Reichstag, time and time 
again sounded warnings against the complications almost 
certain to result from the construction of the railway. 
Speaking before the Reichstag in March, 1911, for ex¬ 
ample, he said: “We are the last to misjudge the great 
value of this road to civilization. We know its economic 
significance: we know that it traverses a region which 
in antiquity was a fabulously fertile country, and we wel¬ 
come it as a great achievement if the Bagdad Railway 
opens up that territory. And if, by gigantic irrigation 
projects, the land can be made into a granary for Europe, 
as well as a land to which we could look for an abundant 
supply of raw materials, such as cotton, that would be 


138 


THE BAGDAD RAILWAY 


doubly welcome.” But that is not all, continued Herr 
Scheidemann. German capitalists would not be able to 
overlook the military-strategic interests of the line, for 
only the establishment of a strong centralized government 
in Turkey “can offer European capitalism the necessary 
security for the realization of its great capitalistic plans.” 
This military strengthening of Turkey would be almost 
certain, he pointed out, to arouse the opposition of Great 
Britain, Russia, and France. Particularly was he de¬ 
sirous of avoiding any additionally irritating relations with 
Great Britain, for the traditional friendship with that na¬ 
tion had already been seriously compromised by colonial 
and naval rivalries. 34 Similar warnings were uttered by 
other Socialists and anti-imperialists. 

Quite different in character was the objection raised to 
the Bagdad Railway by a certain type of more conserva¬ 
tive German. An aggressive policy in the Near East 
naturally would have been distasteful to the diplomatists 
of the old school, who were disposed to adhere to the 
Bismarckian principles of isolating France on the Conti¬ 
nent and avoiding commercial and colonial conflicts over¬ 
seas. According to their point of view, German ventures 
in the Ottoman Empire were certain to lead to two 
complications: first, the support of Austrian imperial am¬ 
bitions in the Balkans; second, a German attempt to main¬ 
tain a dominant political position at Constantinople. Under 
such circumstances, of course, it would not be possible to 
bring about a divorce of the newly married France and 
Russia, for Russian interests in the Near East would brook 
no compromise on the part of the Tsar’s Government. In 
addition, it was feared, the establishment of German ports 
on the Mediterranean and on the Persian Gulf would 
strengthen British antipathy to Germany, already aug¬ 
mented by naval and commercial rivalry. The final out¬ 
come of such a situation undoubtedly would be the forma- 


AN IMPERIAL ENTERPRISE 


139 


tion of a Franco-British-Russian coalition against the 
Central Powers. 

During the Great War these views were given wide 
publicity by Prince Lichnowsky, former German ambassa¬ 
dor to Great Britain. In a memorandum, written for a 
few friends but subsequently published broadcast in 
Europe and America, 35 the Prince vehemently denounced 
the Drang nach Osten as the greatest of German diplo¬ 
matic mistakes and as one of the principal causes of the 
Great War. “We should have abandoned definitely the 
fatal tradition of pushing the Triple Alliance policies in 
the Near East,” he said; “we should have realized that it 
was a mistake to make ourselves solidary with the Turks 
in the south and with the Austro-Magyars in the north; 
for the continuance of this policy . . . was bound in time, 
and particularly in case the requisite adroitness should 
be found wanting in the supreme directing agencies, to 
lead to the collision with Russia and the World War. 
Instead of coming to an understanding with Russia on the 
basis of the independence of the Sultan; . . . instead of 
renouncing military and political interference, confining* 
ourselves to economic interests in the Near East, . . . our 
political ambition was directed to the attainment of a 
dominant position on the Bosporus. In Russia the opinion 
arose that the way to Constantinople ran via Berlin.” This 
was the “fatal mistake, by which Russia, naturally our 
best friend and neighbor, was driven into the arms of 
France and England.” Furthermore, maintained the 
Prince, a policy of Near Eastern expansion is contrary to 
the best commercial and industrial interests of the em¬ 
pire. ‘“Our future lies on the water/ Quite right”; 
therefore it does not lie in an overland route to the Orient. 
The Drang nach Osten “is a reversion to the Holy Roman 
Empire. ... It is the policy of the Plantagenets, not that 
of Drake and Raleigh. . . . Berlin-Bagdad is a blind alley 


140 


THE BAGDAD RAILWAY 


and not the way into the open, to unlimited possibilities, 
to the universal mission of the German nation.” 36 

There may have been another reason for the opposition 
of Prince Lichnowsky to the Bagdad Railway. As the 
owner of large Silesian estates he was agrarian in his 
point of view. If it were true, as was maintained, that 
after the opening of Mesopotamia to cultivation, the 
Railway would be able to bring cheap Turkish grain to 
the German market, the results would not be to the liking 
of the agricultural interests of the empire. As Herr 
Scheidemann informed the Reichstag, there was some¬ 
thing anomalous in the Conservative support of the Bag¬ 
dad Railway on this score, because it was “in most violent 
contrast to their procedure in their own country, where 
they have artificially raised the cost of the necessaries of 
life by incredibly high protective tariffs, indirect taxation, 
and similar methods.” 37 Perhaps Prince Lichnowsky was 
somewhat more intelligent and far-sighted than his land¬ 
owning associates! 

There were some Germans who were not opposed to 
the Bagdad Railway enterprise, but who were opposed to 
the extravagant claims made for it by some of its friends 
and protagonists. A typical illustration of this is the fol¬ 
lowing statement of Count zu Reventlow, shortly before 
the outbreak of the war: “Great Britain, Russia, and 
France, in order to interpose objections, made use of the 
expedient of identifying the Deutsche Bank with the Ger¬ 
man Government. To this there was added the difficult 
and complicating factor that in Germany itself, in many 
quarters, the aim and the significance of the railway plan 
were proclaimed to the world, partly in an inaccurate and 
grossly exaggerated manner. ... In this respect great 
mistakes were made among us, which it was in no way 
necessary to make. The more quietly the Railway could 
have been constructed the better. . . . That it would be 


AN IMPERIAL ENTERPRISE 


141 

possible to make Turkey a dangerous threat against Egypt 
and India, after the development of its railway system, 
was correct, to be sure, but it was imperative not to say 
anything of that kind as long as Great Britain still had 
means to hinder and prevent the construction of the rail¬ 
way.” Similar opinions were expressed from time to time 
on the floor of the Reichstag. 38 

The Bagdad Railway, however, was a triumphant enter¬ 
prise which would brook no opposition. In the army of 
its followers marched the stockholders and directors of 
the Deutsche Bank —such men as Edward B. von Speyer, 
Wolfgang Kapp, Karl von Siemens, Karl Helfiferich, 
Arthur von Gwinner—good patriots all, with a financial 
stake in the Railway. Then there came the engineers and 
contractors who furnished the materials and constructed 
the line and who shared in the profits of its subsidiary 
enterprises—mines, oil wells, docks, wharves, irrigation 
works. Next came the shipping interests—the subsidized 
services of Herr Ballin and the Hamburg-American Line 
included—which were at once the feeders and the fed of 
the Railway. There were also the German traders who 
sought in the Near East a market for their products and 
the German manufacturers who looked to this newly 
opened territory for an uninterrupted supply of raw ma¬ 
terials. In the line of march, too, were the missionaries, 
Catholic and Protestant, who sought to promote a renais¬ 
sance of the Holy Land through the extension of German 
influence there. Bringing up the rear, although by no 
means the least important, were the soldiers and the diplo¬ 
matic and consular officers, those “parasites” of modern 
imperialism who almost invariably will be found in cordial 
support of any movement for political and economic ex¬ 
pansion. In the reviewing stand, cheering the marchers, 
were the great mass of average patriotic citizens who were 
thrilled with “their” Bagdad Railway and “their” Drang 


142 


THE BAGDAD RAILWAY 


nach Osten. And the chief of the reviewers was His 
Imperial Majesty, William II. 39 

If there was a preponderance of opinion in Germany 
favorable to the Bagdad Railway, there was by no means 
a similar favorable sentiment in the rest of Europe. 
Statesmen in the other imperial nations were not unaware 
of the potentialities of railways constructed in the back¬ 
ward nations of the world. They knew that “railways 
are the iron tentacles of latter-day expanding powers. 
They are stretched out caressingly at first. But once the 
iron has, so to say, entered the soul of the weaker nation, 
the tentacles swell to the dimensions of brawny arms, and 
the embrace tightens to a crushing grip.” 40 Russia, Great 
Britain and France, therefore, were gradually led to ob¬ 
struct the progress of the railway by political and economic 
means—at least until such time as they could purge the 
project of its political possibilities or until they could 
obtain for themselves a larger share of the spoils. 

Thus the Bagdad Railway was an imperial enterprise. 
It became an important concern of the Foreign Office, a 
matter of national prestige. It was one of the stakes of 
pre-war diplomacy. Its success was associated with the 
national honor, to be defended, if need be, by military 
force and military alliances. The Railway was no longer 
a railway alone, but a state of mind. Professor Jastrow 
called it “the spectre of the twentieth century”! 41 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 Die Bagdadbahn, p. 46. 

*Stenographische Berichte, XII Legislaturperiode, 1 Session, 
Volume 231 (1908), pp. 4226a, 4253c. 

* Wile, op. cit., pp. 39-40. 

4 Riesser, op. cit., p. 543; The Quarterly Review, Volume 235 
(1921), p. 315. 

8 Parliamentary Debates, House of Lords, Volume 121 (1903), 
p. 1348. 


AN IMPERIAL ENTERPRISE 


143 


For an interesting discussion of this point see George von 
Siemens, “The National Importance of the Bourse,” in The 
Nation (London), October 6, 1900. Cf., also, W. M. Shuster, 
The Strangling of Persia: a Record of European Diplomacy and 
Oriental Intrigue (New York, 1912). 

f W. M. Sombart, Die deutsche V olkswirtschaft in neunzehnten 
Jahrhundert (second edition, Berlin, 1909), p. 184. 

•Regarding early German interest in Near Eastern colonization 
cf . K. A. Sprenger, Babylonien, das reichste Land in der Vorzeit 
und das lohnendste Kolonisationsfeld filr die Gegenwart (Heidel¬ 
berg, 1886) ; Paul Dehn, Deutschland und die Orientbahnen 
(Munich, 1883) ) K. Karger, Kleinasien, ein deutsches Kolonisa¬ 
tionsfeld (Berlin, 1892) ; Deutsche Anspriiche an das tiirkischen 
Erbe (Munich, 1896), a symposium including an article by von 
Moltke. 

8 C. Nawratski, Die jiidische Kolonisation Pal'dstinas (Munich, 

1914) ; Syria and Palestine, p. 59; Mesopotamia, pp. 6-7, 11; 
Anatolia, pp. 4-7. 

10 Supra,' p. 84; H. F. B. Lynch, “The Bagdad Railway,” in 
the Fortnightly Review, March 1, 1911, pp. 376-377; A. Brisse, 
“Les interets de l’Allemagne dans l’Empire Ottoman,” in Revue 
de Geographic, June, 1902, pp. 486-487; P. Rohrbach, Die Bagdad- 
bahn, pp. 17-21, 35. 

11 Stenographische Berichte, XII Legislaturperiode, 1 Session, 
Volume 231 (1908), p. 4253c; P. Rohrbach, Die Bagdadbahn, p. 
16, and Deutschland unter den Weltvolkern, pp. 51-53; Von 
Gwinner, loc. cit., p. 1090. 

” Die Bagdadbahn, p. 16. Cf., also, R. Henry, Des Montes 
Bohemes au Golfe Persique; I’Asie Turque et le Chemin de fer 
de Bagdad (Paris, 1908), p. 509 et seq.; C. H. Becker, Deutsch¬ 
land und der Islam (Stuttgart and Berlin, 1914) ; Ernst Jackh, 
Die deutsch-tiirkische Waffenbriiderschaft (Stuttgart and Berlin, 

1915 ) . 

“H. A. Gibbons, The Reconstruction of Poland and the Near 
East (New York, 1917), pp. 109-110. 

“Quoted by Marriot, op. cit., p. 356. 

18 Die Bagdadbahn, pp. 18-19. 

18 In this connection see an important statement by Sir Thomas 
Barclay in the Proceedings of the Central Asian Society (Lon¬ 
don), March 1, 1911, pp. 21-22, and the opinion of Karl Helf- 
ferich, Die deutsche Tiirkenpolitik, p. 14. 

1T Von Reventlow, op. cit., p. 343. Regarding the so-called 
Drang nach Osten and the coincidence of Austrian and German 
interests in the Near East cf. M. Meyer, Balkanstaaten, Bagdad¬ 
bahn (Leipzig, 1914) ; J. W. Headlam, “The Balkans and Diplo¬ 
macy,” in the Atlantic Monthly (Boston), January, 1916, pp. 124 


144 


THE BAGDAD RAILWAY 


et seq.; N. and C. R. Buxton, The War and the Balkans (Lon¬ 
don, 1915) ; M. I. Newbigin, Geographical Aspects of Balkan 
Problems (London, 1915) ; Evans Lewin, The German Road to 
the East (New York, 1917), Chapters VIII, IX, X; P. N. 
Milyoukov, The War and Balkan Politics (Cambridge, 1917)- 

M Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 266 (1911), p. 5984c. 

19 Der deutsche Imperialisms und die Arbeiterklasse (Bremen, 
1912), pp. 33, 53- 

20 Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 266 (1911), p. 5984c, Volume 231 (1908), p. 4253c. 

21 Charles Sarolea, The. Anglo-German Problem (London, 
1912), p. 252. 

22 A Stiftung is a general religious establishment, this particular 
one serving manifold purposes as school, hospice, home, hospital, 
etc. 

23 J. Richter, A History of Protestant Missions in the Near 
East (New York, 1910), pp. 258-270, 416-419; L. M. Garnett, 
Turkey of the Ottomans (London, 1911), Chapters VII-IX; 
H. C. Dwight, H. A. Tupper, and E. M. Bliss, Encyclopedia of 
Missions (second edition, New York, 1910), pp. 260, 263, 720; 
New Schaff -Herzog Encyclopedia of Religious Knowledge (New 
York, 1912), Volume XII, pp. 39-41. 

24 Cardinal M. H. Ledochowski (1822-1902). Cf. Catholic En¬ 
cyclopedia (New York, 1912), Volume IX, pp. m-112. French 
Catholics openly charged that Cardinal Ledochowski used his 
official position as director of all Catholic missions to promote 
German religious and political interests at the expense of those 
of France. Cf. an article “La Politique Allemande et le Pro- 
tectorat des Missions Catholiques,” in the Revue des deux 
mondes, Volume 149 (1898), pp. 11-12. 

25 On the general subject of German Catholic missions in the 
Near East consult W. Koehler, Die katholische Kirchen des 
Morgenlandes (Darmstadt, 1898) ; H. M. Krose, Katholische 
Missionsstatistik (Freiburg, 1908) ; L. Brehier, article “Turkish 
Empire—Missions,” in the Catholic Encyclopedia, Volume XV, 
pp. 101-102; L. Bertrand, “La Melee des Religions en Orient,” 
in the Revue des deux mondes, Volume 53 (1909), pp. 830-861. 

26 The Jewish Encyclopedia (New York, 1906), Volume XII, 
pp. 286 et seq.; Sir C. W. Wilson, Handbook for Asia Minor 
(London, 1895), PP- 240 et seq. 

27 Etienne Lamy, “La France du Levant: le Voyage de l’Em- 
pereur Guillaume II,” in Revue des deux mondes, Volume 151 
(1899), pp. 336 - 337 ; see also Volume 150 (1898), pp. 421-440, 
880-911. Further observations on the religious aspects of the 
Kaiser’s trip to Palestine are to be found in The Times, Novem- 


AN IMPERIAL ENTERPRISE 145 

ber 23, 1898; Annual Register, 1898, pp. 255-257; W. von Hohen- 
zollern, My Memoirs, 1878-1918, pp. 210-211. 

38 Annual Register, 1898, pp. 257-258. 

39 Ibid., p. 261. Regarding the French protectorate of Catholics 
in the Near East cf. infra, Chapter VII. 

80 “La Politique Allemande et le Protecto-at des Missions 
Catholiques,” in R'eznte des deux mondes, Volume 149 (1898), 

pp. 8-9. 

31 L. Bertrand, “Les Lcoles d’Orient: I. Les ficoles Chretiennes 
et Israelites,” in Revue des deux mondes, Volume 52, new series 
(1909), pp. 755-794 i H. M. Kallen, Zionism and World Politics 
(Garden City, N. Y., 1921), pp. 117 et seq.; A. Paquet, Die 
jiidische Kolonien in Paldstina (Weimar, 1915) ; M. Blancken- 
horn, Syrien und die deutsche Arbeit (Weimar, 1916), pp. 26-30; 
C. Nawratzki, Die jiidische Kolonisation Paldstinas (Munich, 
1914) ; M. Franco, Essai sur Vhistoire des juifs de I’empire 
ottoman depuis les origines jusqu’d nos jours (Paris, 1897) ; G. 
Corneilhan, La judaisme en Egypte et en Syrie (Paris, 1889). 

33 German World Policies, pp. 229-231. On this same general 
subject consult an article by “Immanuel,” entitled “Die Bagdad- 
bahn ein Kulturwerk in Asien,” in Globus, Volume 81 (1902), 
pp. 181-185; M. Hartmann, Islam, Mission, Politik (Leipzig, 
1912). It should be pointed out that the Anatolian Railway 
itself established two schools, at Haidar Pasha and Eski Shehr, 
for the instruction of its employees in German and other sub¬ 
jects. Bohler, loc. cit., p. 275. 

83 That Germans were not unfamiliar with the spectacular his¬ 
tory of this region is evidenced by the popularity of General von 
Moltke’s writings on Turkey, which were published in several 
large editions, apart from his collected works, between 1900 and 
1911. Cf., e.g., H. K. B. (Graf von) Moltke, Briefe iiber Zu- 
stande und Begebenhcitcn in der Tiirkei aus den Jahren 1835 bis 
1839, seventh edition, with explanatory notes by G. Hirschfeld 
(Berlin, 1911). Of this work H. S. Wilkinson, Professor of 
Military History at Oxford University, wrote in the Encyclo¬ 
pedia Britannica (eleventh edition), “No other book gives so 
deep an insight into the character of the Turkish Empire” 
(Volume 18, p. 678). It is interesting to note, also, that Moltke 
himself was a firm believer in the great military utility of all 
railways. For the history of the Near East cf. Jastrow, op. cit., 
pp. 31-81; A. R. Hall, The Ancient History of the Near East 
(fourth edition, London, 1919), Chapters V, VIII, IX, X, XII; 
W. A. and E. T. A. Wigram, The Cradle of Mankind (London, 
1914). A curious sidelight on this phase of the question is the 
assertion of Baron von Hertling, in 1907, that Germany’s chief 
interest in the Bagdad Railway was scientific—geographic, geo- 


146 


THE BAGDAD RAILWAY 


logical, archaeological—not military or economic! Quoted by 
Dawson, The Evolution of Modern Germany, p. 346. 

84 Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 266 (1911), p. 5980c. 

“Karl Maximilan, sixth Prince, Lichnowsky (i860- ) had 

been a member of the German diplomatic service since his youth. 
He was attached to the embassy at London when he was but 
twenty-five and later served at Constantinople, Bucharest, and 
Vienna and in the Foreign Office at Berlin. He resigned in 1904 
to devote himself to the management of his large estates in 
Silesia, but he was recalled in 1912 to become German ambas¬ 
sador to Great Britain, succeeding Baron Marschall von Bieber- 
stein, who had died after only a few months’ service at his new post. 
Prince Lichnowsky’s memorandum My London Mission, 1912- 
1914 was written only to justify the Prince before a small circle 
of his acquaintances. Fugitive copies reached the press, however, 
and the full text was published in the Berlin Borsen-Courier of 
March 21, 1918. The quotations here given are from the trans¬ 
lation of Munroe Smith, The Disclosures from Gertnany (New 
York, 1918). 

“ The Disclosures from Germany, pp. 37-41, 127. 

87 Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 226 (1911), p. 5980c. Cf., also, W. H. Dawson, The 
Evolution of Modern Germany, pp. 346 et seq. 

“Von Reventlow, op. cit., p. 340; Stenographische Berichte, 
XII Legislaturperiode, 2 Session, Volume 226 (1911), p. 5994b. 

88 Regarding the Emperor’s personal interest in the Bagdad 
Railway consider the following Reuter dispatch, published in 
The Near East, December 6, 1911, p. 143: “By desire of the 
German Emperor, Herr Gwinner, director of the Deutsche Bank, 
will give an address on the Bagdad Railway before the Emperor 
and a number of invited guests, in the Upper House of the 
Prussian Diet soon after the Emperor’s return to Berlin, Decem¬ 
ber 8.” 

40 E. J. Dillon, quoted by Lothrop Stoddard, The New World 
of Islam, p. 98. 

"Jastrow, op, cit., p. 9. 


CHAPTER VII 

RUSSIA RESISTS AND FRANCE IS UNCERTAIN 
Russia Voices Her Displeasure 

Russian objections to the Bagdad Railway were put 
forth as early as 1899, the year in which the Sultan an¬ 
nounced his intention of awarding the concession to the 
Deutsche Bank. The press of Petrograd and Moscow 
roundly denounced the proposed railway as inimical to 
the vital economic interests of Russia. It was claimed 
that the new line would offer serious competition to the 
railways of the Caspian and Caucasus regions, that it 
would menace the success of the new Russian trans-Per¬ 
sian line, and that it might prove to be a rival even of the 
Siberian system. 1 The extension of the existing Anatolian 
Railway into Syria, it was asserted, would interfere with 
the realization of a Russian dream of a railway across 
Armenia to Alexandretta—a railway which would give 
Russian goods access to an all-year warm water port on 
the Mediterranean. The Mesopotamian sections of the 
line, with their branches, might open to German competi¬ 
tion the markets of Persia and, later, of Afghanistan. If 
German capital should develop the grain-growing possi¬ 
bilities of the Tigris and Euphrates valleys, what would 
happen to the profits of the Russian landed aristocracy? 
And if the oil-wells of Mesopotamia were as rich as they 
were said to be, what would be the fate of the South 
Russian fields ? The Tsar was urged to oppose the grant¬ 
ing of the kilometric guarantee to the concessionaires, on 
the ground that the increased charges on the Ottoman 

i 47 


148 


THE BAGDAD RAILWAY 


Treasury would interfere with payment of the indemnity 
due on account of the War of 1877. 2 

Russian objections to the Bagdad Railway did not meet 
with a sympathetic reception in England. The Engineer, 
of August 11, 1899, in an editorial “Railways in Asia 
Minor,” for example, expressed its firm opinion that many 
of the demands for the protection of Russian economic 
interests in Turkey were specious. “The world has yet 
to learn,” ran the editorial, “that Russia allows commer¬ 
cial considerations to play any great part in her ideas of 
constructing railways; the Imperial authorities are influ¬ 
enced mainly by the policy of political expediency. The 
commercial competition thus foreseen by Russia is put 
forward merely as a stop-gap until Russia can get time and 
money to repeat in Asia Minor the methods of which she 
has made such success in Persia and the Far East.” Other 
British opinion was of like character. 

The Russian claim for exclusive control of railway 
construction in northern Anatolia met with equally bitter 
denunciation. The London Globe, of August 10, 1899, 
characterized as “impudence” the intention of the Russian 
Government “to regard Asiatic Turkey as a second Man¬ 
churia, on the pretence that the whole country has been 
mortgaged to Russia for payment of the Turkish war 
indemnity. If this preposterous claim were admitted, not 
only the development of Asia Minor but the opening of 
another short-cut to the East might be delayed until the 
end of the next century. Russia had so many ambitious 
and costly projects on hand at present that her nearly 
bankrupt treasury could not meet any fresh drain, and 
especially one of such magnitude as that in question. The 
policy of her Government, therefore, is to preserve Asia 
Minor as a tabula rasa on which the Russian pen can 
write as it pleases hereafter. It is a cool project, truly, 
but the success which has attended similar Russian en- 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 149 

deavors in the Far East will not, we undertake to predict, 
meet with repetition.” 

The Russian Government, meanwhile, was interposing 
serious objections to the Bagdad Railway. M. Zinoviev, 
the Tsar’s minister at Constantinople, informed the Sub¬ 
lime Porte that the proposed extension of the Anatolian 
Railways from Angora across Armenia to Mosul and 
Bagdad would be a strategic menace to the Caucasus fron¬ 
tier and, as such, could not be tolerated. If Russian 
wishes in the matter were not respected, immediate meas¬ 
ures would be taken to collect all arrears—amounting to 
over 57,000,000 francs—of the indemnity due the Tsar 
under the Treaty of Berlin (1878). The outcome of these 
demands was submission by the Sultan’s Government. The 
proposed Angora-Kaisarieh-Diarbekr route was abandoned 
in favor of one extending from Konia, through the 
Cilician Gates of the Taurus Mountains, to Adana, Aleppo, 
and Mosul—the latter being the route over which the 
Bagdad Railway actually was constructed. The discus¬ 
sions between the Russian and Ottoman Governments 
subsequently were crystallized and confirmed by the so- 
called Black Sea Agreement of 1900, which pledged the 
Sultan to award no further concessions for railways in 
northern Anatolia or Armenia except to Russian nationals 
or to syndicates approved by the Tsar, and, furthermore, 
to award such Russian concessionaires terms at least as 
favorable as those to be granted the Bagdad Railway 
Company. 3 

The agreement thus reached, however, satisfied Russia 
only temporarily. In December, 1901, M. Witte, Imperial 
Minister of Finance at Petrograd, stated categorically that 
he considered the construction of the Bagdad Railway by 
any Power other than Russia a menace to the imperial 
interests of the Tsar. Proposals for the internationaliza¬ 
tion of the line he asserted to be chimerical; in his opinion 


THE BAGDAD RAILWAY 


150 

the nationals of one Power would be certain to control the 
administration of the enterprise. The Tsar was deter¬ 
mined that Russian capitalists should have nothing to do 
with the Railway; Russian capital, for a time at least, 
should be conserved for industrial development at home. 
“The Government of Russia,” he concluded, “is more in¬ 
terested in devoting its available resources to the construc¬ 
tion of new railways within the Empire than it is in 
promoting an enterprise destined to offer competition to 
Russia’s railways and industries.” 4 In 1902 and again 
in 1903, M. Witte made similar statements, asserting that 
he saw no reason for changing his point of view. 5 

Witte’s words carried weight in Russia. As an erst¬ 
while railway worker he knew the great economic im¬ 
portance of railways. During his regime as Minister of 
Finance (1893-1903) an average of 1,400 miles of rails 
was laid down annually in Russia; the Transcaspian and 
Transcaucasian systems were constructed, and the Siberian 
Railway was pushed almost to completion. He foresaw 
that one day these railways would be powerful weapons 
in the commercial and political expansion of an indus¬ 
trialized Russia. As an official in charge of troop move¬ 
ments during the Russo-Turkish War of 1877 he had 
learned to understand the function of railways in offensive 
and defensive warfare. Although he considered it waste¬ 
ful to construct railways for military purposes alone, he 
believed that every railway was of strategic value; in fact, 
he looked upon railways as the most important single 
factor in national preparedness. As the foremost pro¬ 
tagonist of Russia’s tariff war with the German Empire he 
was opposed to any plan which promised to promote Ger¬ 
man commerce and to open up new resources and new 
markets to German industry. As a native of the Caucasus 
region and as an ardent advocate of colonial expansion 
Witte looked forward to the time when Russia herself— 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 151 

possessed of capital for the purpose—should dominate the 
transportation system of Asiatic Turkey. 6 

It is questionable, however, if the Bagdad Railway really 
threatened any important Russian economic interests. The 
railways of southern Russia, so far from being injured by 
competition with the proposed new railways of Turkey, 
would be almost certain to profit from any increase of 
trade in the region of the Black Sea. The Russian dream 
of a railway to Alexandretta was still very much of a 
dream; but even if the contrary had been the case, its 
construction for peaceful purposes would not have been 
hindered by the Bagdad plan. The claim that a trans- 
Mesopotamian railway would compete with the Far East¬ 
ern traffic of the Siberian Railways was purely fantastic; 
it overlooked the obvious fact that an ideal shipping route, 
like a straight line, is the shortest distance between two 
points. It would be at least a generation before Meso¬ 
potamian grain and oil could play a prominent part in the 
Russian market. 7 

But with Russian political interests the case was differ¬ 
ent. Ever since the days of Peter the Great, the Russian 
Tsars had persistently and relentlessly continued their 
efforts to obtain a ‘'window” on the Mediterranean. This 
historical trend toward the open sea led to a well-defined 
intention on the part of Russia, in one way or another, 
to take Constantinople from the Turks. The dynastic 
interests of Russia were reenforced by commercial con¬ 
siderations. “Most of Russia’s southern trade is bound 
to pass through the Bosporus. Her wheat and hides, her 
coal and oil cannot reach the European markets any other 
way; her manganese and petroleum are inaccessible to 
other nations if they cannot find an outlet from the 
Caucasus to the Dardanelles.” During the Turco-Italian 
War the closing of the Straits for a few days was said to 
have cost Russian shipping about eight million francs. 8 


152 


THE BAGDAD RAILWAY 


Bonds of religion and race enlisted Russian sympathy in 
the struggle of the Balkan states to win independence 
from Turkey—a cause which harmonized with the Russian 
ambition to bring about the disintegration of Turkey-in- 
Europe. The rise of German influence at Constantinople 
—of which the Anatolian and Bagdad Railway concessions 
were a tangible manifestation—had been a source of 
annoyance to Russia, not only because it prevented Rus¬ 
sian domination of Turkish affairs and because it strength¬ 
ened the position of Austria-Hungary in the Balkans, 
but also because it tended to strengthen Turkish military 
power. It was annoying enough to witness the rising 
political and economic power of Germany in the Near 
East; it was more annoying to realize that, under German 
guidance, the Turks might experience an economic and 
military renaissance which would end once and for all the 
Russian hope of possessing ancient Byzantium. 

Strategically the construction of the Bagdad Railway 
was a real menace to Russian ambitions in the Near East. 
The completion of the line would enable the Ottoman 
Government to effect a prompt mobilization along the 
Armenian front. For example, the Fifth Turkish Army 
Corps, from Damascus, and the Sixth Corps,*from Bag¬ 
dad—which in the War of 1877 arrived on the'field after 
a series of forced marches, minus a large number of its 
effectives, too late to save Kars or to raise the siege of 
Erzerum—could be brought quickly by rail from Syria 
and Mesopotamia to Angora for the defence of northern 
Anatolia. In the event of a Russo-Turkish war such a 
maneuver would render extremely precarious a Russian 
invasion of Armenia or a Russian advance on Constanti¬ 
nople along the south shore of the Black Sea. In a gen¬ 
eral European war in which both Russia and Turkey 
might be involved the existence of this railway line would 
make possible a Turkish stroke at the southern frontier 



RUSSIA RESISTS AND FRANCE IS UNCERTAIN 153 

of Russia, thus diverting troops from the European front. 
That the German General Staff was not ignorant of these 
possibilities is certain because of the presence in Turkey, 
during this time, of General von der Goltz . 9 

The Russian Government and the Russian press were 
fully aware of the menace of the Bagdad Railway to Rus¬ 
sian imperial interests. That the Tsar did not offer serious 
resistance to the construction of the line was due to the 
rise of serious complications in the Far East, the crush¬ 
ing defeats of his army and navy in the War with Japan, 
friction with Great Britain in Persia and in Central Asia, 
and the outbreak of a revolutionary movement at home. 
But the Russian press called upon French citizens to show 
their loyalty to the Alliance by refusing to participate in 
the financing of the Railway . 10 

The plaintive call of the Russians, however, did not fall 
on altogether sympathetic ears in the Republic; a con¬ 
flict of interests led some French citizens to invest in the 
Railway even though it was denounced by their Gov¬ 
ernment. 


The French Government Hesitates 

The position of France in the Bagdad Railway contro¬ 
versy was anomalous. In addition to political, economic, 
and religious reasons for opposing the construction of the 
trans-Mesopotamian railway, the French had many his¬ 
torical and sentimental interests which influenced the Gov¬ 
ernment of the Republic to resist German penetration in 
the Near East. French patriots recalled with pride the 
role of France in the Crusades; they remembered that 
Palestine itself was once a Latin kingdom; they believed 
that Christians in the Levant looked to France as their 
protector and that this protection had received formal 
recognition under the Capitulations, negotiated by Fran- 


154 


THE BAGDAD RAILWAY 


cis I and renewed and extended by his successors from 
Henry IV to Louis XV. They knew that the French 
language was the language not only of the educated classes 
in Turkey, but, also, in Syria, of the traders, so that it 
could be said that a traveler in Syria might almost con¬ 
sider himself in a French dependency. They were proud 
of the fact that the term “Frank” was the symbol of 
Western civilization in the Near East. They were aware 
of the far-reaching educational work of French mission¬ 
aries. France, to their mind, had done a great work 
of Christian enlightenment in the Moslem stronghold, 
Turkey. Was the Government of the Republic to be 
backward in asserting the interests of France, when Bour¬ 
bons and Bonapartes had so ably paved the way for the 
extension of French civilization in the Holy Land? Rea¬ 
soning of this kind was popular in France during 1898 
and 1899, when the Kaiser’s visit to Abdul Hamid was 
still under discussion and when the first indications were 
given that a German company was to be awarded a con¬ 
cession for the construction of a railway from Constanti¬ 
nople to the Persian Gulf. 

On the other hand, however, there was a considerable 
and a powerful group in France which urged the French 
Government, if not to support the project of the Bagdad 
Railway, at least to put no obstacles in its way. The 
members of this group were French financiers with in¬ 
vestments in Turkey. They believed that the construction 
of the Railway would usher in a new era of prosperity in 
the Ottoman Empire which would materially increase the 
value of the Turkish securities which they owned. If 
the interests of these financiers were not supported by 
historical traditions and nationalist sentiment, they were 
tangible and supported by imposing facts. It was esti¬ 
mated, in 1903, that French investors controlled three- 
fifths, amounting to a billion and a half of francs, of the 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 155 

public obligations of the Imperial ‘Ottoman Treasury. 
French promoters owned about 366 million francs in the 
securities of Turkish railroads and over 162 millions in 
various industrial and commercial enterprises in Asia 
Minor. French banks had approximately 176 million 
francs invested in their branches in the Near East. The 
total of all French investments in Turkey was more than 
two and a half billion francs. 11 The French-controlled 
Imperial Ottoman Bank, the French-owned Smyrna- 
Cassaba Railway, and the French-administered Ottoman 
Public Debt Council all favored the promotion of the 
Bagdad Railway idea. - • 

For a time, the French Government decided to follow 
the, lead of the financial interests. French bankers, in 
1899, had entered into an agreement with the Deutsche 
Bank to operate the Anatolian and Smyrna-Cassaba sys¬ 
tems under a joint rate agreement, to cooperate in the 
construction of the Bagdad Railway, and to attempt to 
secure diplomatic support for their respective enterprises. 12 
At the request of the Imperial Ottoman Bank, M. Con- 
stans, the French Ambassador at Constantinople, adopted 
a policy of “benevolent neutrality” toward the negotia¬ 
tions of the Deutsche Bank with the Ottoman Ministry 
of Public Works. This course was approved by M. Del- 
casse, Minister of Foreign Affairs, who considered the 
Bagdad Railway harmless because French capitalists were 
to participate in its construction and operation. Just how 
much this diplomatic non-interference assisted the 
Deutsche Bank in obtaining the concessions of 1899 and 
1903 is an open question. It is extremely doubtful if 
French objections could have blocked the award of the 
concessions, although M. Cheradame subsequently main¬ 
tained that the consummation of the plans of the Deutsche 
Bank would have been impossible without the tacit 
cooperation of the French embassy at Constantinople. 13 


THE BAGDAD RAILWAY 


156 

Between 1899 and 1902 the proposed Bagdad Railway 
was discussed occasionally by French publicists, but it 
could not have been considered a matter of widespread 
popular interest. In the spring of the latter year, how¬ 
ever, immediately after the award of the first Bagdad 
concession by the Sultan, a bitter protest was voiced in the 
Chamber of Deputies against the policy of the French 
Government. M. Firmin Faure, a deputy from Paris, 
introduced a resolution that “the issue of debentures, 
stocks, or bonds designed to permit the construction of 
the Bagdad Railway shall not be authorized in French 
territory except by vote of the Chamber of Deputies.” 
In a few words M. Faure denounced the Bagdad Rail¬ 
way plan as a menace to French prestige in the Near 
East and as a threat against Russian security in the Cau¬ 
casus. He believed, furthermore, that Bagdad Railway 
bonds would be an unsafe investment: “It is a Panama 
that is being prepared down there. Do you choose, per¬ 
chance, my dear colleagues, to allow French capital to be 
risked in this scheme without pronouncing it foolhardy? 
Do you choose to allow the great banks and the great 
investment syndicates to realize considerable profits at the 
expense of the small subscribers? If that is how you 
attend to the defence of French capital, well and good, 
but you will permit me to disagree with you.” He warned 
the members of the Chamber that they would not dare 
to stand for reelection if they thus allowed the interests 
of their constituents to be prejudiced. 14 

M. Delcasse, Minister of Foreign Affairs, objected 
to the resolution. He denied that French diplomacy had 
assisted the German bankers in securing the Bagdad Rail¬ 
way concession. 15 But the concession was a fait accompli , 
and it also was a fact that French financiers felt they 
could not afford to refuse the offer of participation with 
the German concessionaires. “I venture to ask how it 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 157 

can be prevented, and I inquire of the Chamber whether, 
when such an enterprise has been arranged and decided 
upon, it is not preferable that French interests, so con¬ 
siderable in the East, should be represented therein.” He 
promised that every possible precaution would be taken 
to assure French capitalists a share in the enterprise equal 
to that of any other power. The Minister was upheld, the 
motion being defeated by a vote of 398 to 72. 16 

Less than two years later, in October, 1903, the Paris 
Bourse, at the instigation of the French Government, ex¬ 
cluded all Bagdad Railway securities from the privileges 
of the Exchange. This change in policy was not so much 
the result of a volte face on the part of M. Rouvier and 
M. Delcasse as it was a consequence of a persistent clamor 
on the part of the French press that the construction of 
the Bagdad Railway, which was popularly considered a 
serious menace to French interests, should be obstructed 
by every effective method at the disposal of the Gov¬ 
ernment. 17 

French Interests are Believed to be Menaced 

The commercial interests of southern France were op¬ 
posed to participation in the Bagdad Railway by the 
French Government or by French capitalists. Business 
men were fearful, for example, lest “the new route to 
India” should divert traffic between England and the East 
from the existing route across Europe via Calais to Mar¬ 
seilles and thence by steamer to Suez, to a new express 
service from Calais to Constantinople via Ostend, Cologne, 
Munich, and Vienna. Thus the importance of the port 
of Marseilles would be materially decreased, and French 
railways would lose traffic to the lines of Central Europe. 
Also, there was some feeling among the manufacturers of 
Lyons that the rise of German economic power in Turkey 


158 


THE BAGDAD RAILWAY 


might interfere with the flow to France of the cheap raw 
silk of Syria, almost the entire output of which is con¬ 
sumed in French mills. The fears of the silk manufac¬ 
turers were emphasized by one of the foremost French 
banks, the Credit Lyonnais, which maintained branches in 
Jaffa, Jerusalem, and Beirut, for the purpose of financing 
silk and other shipments. This bank had experienced 
enough competition at the hands of the Deutsche Paldstina 
Bank to assure it that further German interference was 
dangerous. 18 

From the political point of view there was more to be 
said for the French objections. Foremost among serious 
international complications was the strategic menace of 
the Railway to Russia. The Bagdad enterprise was de¬ 
scribed as the “anti-Russian maneuver par excellence” 
To weaken Russia was to undermine the “foundation stone 
of French foreign policy,” for it was generally conceded 
that “the Alliance was indispensable to the security of 
both nations; it assured the European equilibrium; it was 
the essential counterbalance to the Triple Alliance.” 19 
Then, too, the question of prestige was involved! In the 
great game of the “balance of power” an imperial advance 
by one nation was looked upon as a humiliation for 
another! Thus a German success in Turkey, whether 
gained at the expense of important French interests or 
not, would have been considered as reflecting upon the 
glory of France abroad! There was also a menace to 
France in a rejuvenated Turkey. A Sultan freed from 
dependence upon the Powers might effectively carry on a 
Pan-Islamic propaganda which would lead to serious dis¬ 
content in the French colonial empire in North Africa. 
What would be the consequences if the Moors should 
answer a call to a Holy War to drive out the infidel 
invaders ? 20 

Still more fundamental, perhaps, than any of these 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 159 

reasons was the fear among far-sighted French diplo¬ 
matists that the Bagdad Railway wouM be but the first 
step in a formal political alliance between Germany and 
Turkey. The French, more than any other European 
people, have been schooled in the political ramifications 
of foreign investments. The very foundations of the Rus¬ 
sian Alliance, for example, were loans of French bankers 
to Russian industries and to the Tsar. Might not Baron 
Marschall von Bieberstein and Karl Helfferich, Prince 
von Biilow and Arthur von Gwinner, tear a leaf out of 
the book of French experience? Certainly the way was 
being paved for a Turco-German alliance, and M. Desch- 
anel eloquently warned his colleagues in the Chamber 
of Deputies that there were limitless possibilities in the 
situation. Speaking in the Chamber on November 19, 
1903, he said: “Behold a railway that can divert from 
the Suez Canal a part of the traffic of the Far East, so 
that the railways of Central Europe will become the com¬ 
petitors of Marseilles and of our French railways! Be¬ 
hold a new colonial policy which, instead of conquering 
territories by force of arms, makes war with funds; pos¬ 
sesses itself of the means of communication; crushes out 
the life of states, little by little, by the artifices of the 
financiers, leaving them only a nominal existence! And 
we, who possess the world’s greatest fund of capital, that 
supreme weapon of modern conquest, we propose to place 
it at the disposal of foreign interests hostile to our funda¬ 
mental and permanent foreign policies! Alas, it is not 
the first time that our capital has gone to nourish rival, 
even hostile, schemes !” 21 

Religious interests supported the political and economic 
objections to the construction of the Bagdad Railway. 
French Clericals were fearful lest this railway become the 
very backbone of German interests in the Ottoman Em¬ 
pire, thus strengthening German missionary activities and 


i6o 


THE BAGDAD RAILWAY 


jeopardizing the time-honored protectorate of France over 
Catholics in the Near East. As early as 1898 an anony¬ 
mous writer sounded a clarion call to Catholics and na¬ 
tionalists alike that German economic penetration in 
Turkey was a matter of their common concern: “Pre¬ 
eminent in the Levant, thanks to the friendship of the 
Sultan and to the progress of the commerce of her 
nationals, Germany, if she gathers in, besides, our religious 
heritage, will crown her formidable material power with an 
enormous moral power; she will assume in the world the 
eminent place which Charlemagne, St. Louis, Francis I, 
Richelieu, Louis XIV, and Napoleon have assured to our 
country. The ‘nationalization’ of missions will inaugurate 
a period of German supremacy in the Orient, where the 
name of France has been so great and where it still is so 
loved.” 22 

France occupied a unique position in the Near East. 
For centuries she had been recognized as shouldering 
a special responsibility in the protection of Catholics and 
of Catholic missions in the Ottoman Empire. This pro¬ 
tectorate—which as late as 1854 had provided the occa¬ 
sion for a war between the empire of Napoleon III and 
Russia—had been acquired not by military conquest alone, 
but by outstanding cultural and religious services as 
well. 23 

Certainly at the end of the nineteenth century French 
missions held a preeminent position in Turkey. French 
Jesuits and Franciscans maintained elementary, secondary, 
and vocational schools in Aleppo, Damascus, Beirut, 
Jerusalem, and numerous smaller towns throughout Syria 
and Palestine. A Jesuit school established at Beirut in 
1875 rapidly expanded its curricula until it obtained 
recognition as a university, its baccalaureate degree being 
accredited by the French Ministry of Public Instruction 
early in the decade of the eighties. The medical faculty 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 161 


of this Jesuit University—said to have been founded under 
the patronage of Jules Ferry and Leon Gambetta—was 
given authority to grant degrees, which were recognized 
officially by France in 1888 and by Turkey in 1898. In 
addition to the classical and medical courses, instruction 
was given in law, theology, philosophy, and engineering. 
A preparatory school, conducted in connection with the 
university, had an enrollment of about one thousand 
pupils. By 1907 it was estimated that over seventy thou¬ 
sand Syrian children were receiving instruction in French 
religious schools. In addition to these educational accom¬ 
plishments mention should be made of the work of the 
Sisters of St. Joseph of the Apparition and the Society of 
St. Vincent de Paul, who made Jerusalem, Bethlehem, and 
other towns centers of French religious and philanthropic 
activity. 24 

The progress of German missions and schools was a 
challenge to the paramount position of France in the 
cultural development of the Near East. And it was not 
a challenge which was passed unanswered. To counteract 
the influence of German schools established, with the aid 
of the Railway Company, at a few of the more important 
points along the Anatolian lines, French missionary schools 
were established at Eski Shehr, Angora, and Konia. 25 

Furthermore, German missions seemed to bring with 
them an additional threat—an attempt to discredit the 
French claim to an exclusive protectorate over Catholics 
in the Ottoman Empire. As early as 1875 the German 
Government declared that “it recognized no exclusive right 
of protection of any power in behalf of Catholic establish¬ 
ments in the East,” and that “it reserved its rights with 
regard to German subjects belonging to any of these 
establishments.” 26 This position appeared to be strength¬ 
ened by Article 62 of the Treaty of Berlin (1878), which 
affirmed that “ecclesiastics, pilgrims, and monks of all 


THE BAGDAD RAILWAY 


162 

nationalities traveling in Turkey shall enjoy the same 
rights, advantages, and privileges. The official right of 
protection of the diplomatic and consular agents of the 
Powers in Turkey is recognized, with regard both to the 
above-mentioned persons and to their religious, charitable, 
and other establishments in the Holy Places and else¬ 
where.” 27 

In 1885 it was proposed that the Sultan should appoint 
his own emissary to the Vatican, thus rendering 
supererogatory the time-honored procedure of transacting 
all affairs of the Church through the French embassy 
at Constantinople. French Catholics immediately charged 
that this proposal emanated from Berlin and did every¬ 
thing possible to oppose its acceptance. Italian and Ger¬ 
man influences in Rome heartily supported the idea of 
direct communications between the Vatican and the Porte, 
but Pope Leo XIII and Cardinal Rampolla finally decided 
against maintaining diplomatic relations with the Infidel. 28 

Largely as a result of Italian insistence that the rights 
of the diplomatic and consular agents of the Kingdom 
be given recognition, it was considered advisable for the 
Pope to state definitely his position on the French pro¬ 
tectorate. This he did in an encyclical of May 22, 1888, 
Aspera rerum conditio, which informed all Catholic mis¬ 
sionaries in the Levant that “the Protectorate of the French 
Nation in the countries of the East has been established 
for centuries and sanctioned even by treaties between the 
empires. Therefore there must be absolutely no innova¬ 
tion in this matter; this Protectorate, wherever it is in 
force, is to be religiously preserved, and the missionaries 
are warned that, if they have need of any help, they are 
to have recourse to the consuls and other ministers of 
France.” 29 In a letter dated August 1, 1898, addressed 
to Cardinal Langenieux, Archbishop of Rheims, Leo XIII 
again confirmed this opinion: “France has a special mis- 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 163 

sion in the East confided to her by Providence—a noble 
mission consecrated not alone by ancient usage, but also 
by international treaties. . . . The Holy See does not wish 
to interfere with the glorious patrimony which France has 
received from its ancestors, and which beyond a doubt it 
means to deserve by always showing itself equal to its 
task.” 30 No more sweeping confirmation of French rights 
could have been desired. 

The German Government, however, was by no means 
willing to accept these pronouncements as final. In the 
name of nationalism German unification was accomplished ; 
in the name of nationalism German missionaries abroad 
must look to their own Government for protection. To 
admit a foreign claim to the protectorate of Germans was 
to stain the national honor. To accede to the French pre¬ 
tension that Catholic Germans occupied an inferior posi¬ 
tion in the East was to decrease the prestige of German 
citizenship. The Shantung incident was a noisy demon¬ 
stration of the intention of the German Empire to recog¬ 
nize no such distinctions. The visit of the Kaiser to the 
Sultan in the same year, 1898, was directly concerned with 
the determination of Wilhelmstrasse to assert the secular 
rights of German missionaries, Catholics as well as 
Protestants. 31 

French Catholics denied the German claims and worked 
upon national sentiment at home to add to the growing 
fear of German imperial aggrandizement. “Catholic 
missions,” it was asserted, “by their very nature and pur¬ 
pose are a supra-national institution, similar to the sov¬ 
ereign majesty of the Pope.” What could be the purpose 
of the Germans in asserting the doctrine of the “nation¬ 
alization of missions,” if it were not to undermine French 
influence in Turkey? How great would be the national 
humiliation if the protectorate of the Faithful in the East 
should pass from the hands of Catholic France to Protes- 


164 


THE BAGDAD RAILWAY 


tant Prussia! The Germans, too, were prejudicing the 
Holy See against the Republic. A notoriously pro-German 
party at the Vatican, supported by their political allies, 
the Italians, were winning the sympathies of the Pope 
by insinuating references to “red France,” “schismatic 
Russia,” and “heretical England” ! Thus was a dark plot 
being hatched against France and against the unity of 
Christendom! 32 

This situation was not without its advantages to the 
French Clericals. Between the years 1899 and 1905, when 
the Bagdad Railway controversy was at its height, a 
serious domestic controversy was raging in France. In a 
bitter fight to extirpate Clericalism the Republican min¬ 
istries of Waldeck-Rousseau and Emile Combes had put 
through law after law to curb the power of the Church 
and to break up the influence of the religious orders. The 
Clericals were waging a losing battle. But perhaps the 
last crushing blows might be warded off by resorting to a 
favorite maneuver of Louis Napoleon—the diversion of 
popular attention from domestic affairs to foreign policy. 
If Republicans and Monarchists, Socialists and bourgeois 
Liberals, Radicals and Conservatives, Free-Masons and 
Clericals, could be aroused against the German advance in 
Turkey, a common outburst of national pride might ob¬ 
scure, for a time at least, the domestic war on organ¬ 
ized Catholicism. Therefore Clerical writers in France 
warned of the menace of the Bagdad Railway to the 
Russian Alliance, to the advance of French commerce, and 
to the ancient prerogatives in the East. “It is Germany, 
preeminent at Constantinople,” said an anonymous writer 
in the Revue des deux mondes, “which blocks the future 
of Pan-Slavism in the East; it is Germany, installed in 
Kiao-chau, which can forestall Muscovite expansion to¬ 
ward the Pacific; it is Germany which, in the East and 
Far East, seeks to undermine our religious protectorate. 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 165 


Faced by the same adversary, it is natural that France 
and Russia should build up a common defence.” That 
France should not desert her ally Russia or her own 
prerogatives in the protectorate of Near Eastern missions 
is self-evident. “The protectorate over Catholics is for us, 
in short, a source of material advantage!” 33 

The Bagdad Railway Claims French Supporters 

The Bagdad Railway was not without friends in 
France. The French chairman of the Ottoman Public 
Debt Administration was an enthusiastic supporter of the 
project and served on the Board of Directors of the Bag¬ 
dad Railway Company, for he believed that widespread 
railway construction was essential to the establishment, 
upon a firm basis, of Turkish credit. The French-con¬ 
trolled Imperial Ottoman Bank, as early as 1899, had 
agreed to participate in the financing of the Bagdad line, 
and an officer of the bank had accepted the position of 
vice-president of the Bagdad Railway Company at the time 
of its incorporation in 1903. iThe French owners of im¬ 
portant railways in Anatolia and Syria believed it would 
be suicidal for them to obstruct the plans of the Deutsche 
Bank and preferred to cooperate with the German con¬ 
cessionaires. Unless the French opponents of the Bagdad 
Railway were prepared to offer these interests material 
compensation for resisting its construction, it was hardly 
likely that, hard-headed business men as they were, they 
would jeopardize the security of their investments for the 
sake of such intangible items as international prestige and 
protectorates of missions. 

There were two important groups of French-owned 
railways in Turkey-in-Asia. In Anatolia there was the 
important Smyrna-Cassaba system, extending east and 
north-east from the French-developed port of Smyrna. 


THE BAGDAD RAILWAY 


166 


At Afiun Karahissar the main line of this system from 
Smyrna connected with the Anatolian line from Con¬ 
stantinople to Konia. Therefore a route for French trade 
already existed to all of Asia Minor; and when the Bag¬ 
dad Railway was completed, direct service could be insti¬ 
tuted from Smyrna to Adana, Aleppo, Mosul, Bagdad, 
and Basra. The second group of French railways was 
the Syrian system, owned by La Societe Ottomane du 
Chemm de fer Damas-Hama et Prolongements. This 
company operated railway lines from Aleppo to Damascus, 
from Tripoli to Homs, from Beirut to Damascus, from 
Jaffa to Jerusalem, and between other less important 
points. After the completion of the Bagdad Railway this 
group of railways would have direct connections, at 
Aleppo, with all of Europe via Constantinople and with 
the Indies via Basra and the Persian Gulf. Perhaps the 
French interests controlling these railways were chagrined 
at their inability to secure the trans-Mesopotamian con¬ 
cession for themselves. But/faced with the fait accompli 
of the German concession, they realized that cooperation 
with the Bagdad Railway would make their lines an in¬ 
tegral part of a greater system of rail communications 
within Turkey and also between Turkey and the nations 
of Europe and Farther Asia. Refusal to cooperate would 
be cutting off their noses to spite their faces. 3 F 

French bankers were disposed to look at the Bagdad 
enterprise in much the same light. The economic renais¬ 
sance of Turkey, which it was hoped would be an effect 
of improved rail communications, would increase the value 
of their earlier investments in that country. But, in addi¬ 
tion, the Bagdad Railway offered handsome profits in 
itself: profits of promoting the enterprise and floating the 
various bond issues; profits of the construction company, 
in which French capital was to participate; profits of the 
shareholders when the Railway should become a going 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 167 

concern. True, the Council of Ministers had requested 
the Bourse to outlaw the Bagdad securities. But, after 
all, when profits are at stake, what is a mere resolution 
of the Cabinet among friends? A syndicate of French 
financiers invested heavily in the bonds and stock of the 
Bagdad Railway Company, the hostility of their Gov¬ 
ernment notwithstanding. And it was said that one of the 
bankers who participated in the syndicate was none other 
than M. Rouvier, Minister of Finance in the Cabinet of 
M. Combes, and subsequently Prime Minister. 35 

Many intelligent French students of foreign affairs felt 
that a merely obstructionist policy on the part of France 
toward the Bagdad Railway would be futile and, in the 
end, disastrous. In spite of the many historical and senti¬ 
mental attachments of France in the Near East, she really 
had no vital interests which were jeopardized by the 
Bagdad enterprise. It was urged, therefore, that she 
should play the role of conciliator of the divergent inter¬ 
ests of Russia, Great Britain, Germany, and Turkey. A 
forward-looking program, it was suggested, would be to 
urge these nations to reach a full and equitable agreement 
in the promotion of “a project unquestionably valuable 
in the progress of the whole human race.” National 
material interests should be merged in “the superior 
interests of civilization.” Mere self-interest demanded 
this of France, because, should a war break out over the 
Near Eastern question, France would most certainly be¬ 
come involved. 36 

As regards the claims of Russia to influence French 
policy in the Bagdad Railway affair, there was a con¬ 
siderable amount of irritability exhibited by French pub¬ 
licists. It was pointed out, for example, that M. Witte 
was unwilling to accept “internationalization” of the Rail¬ 
way at a time when the German and French bankers were 
prepared to effect a satisfactory settlement on that basis. 


i68 


THE BAGDAD RAILWAY 


It was asserted, also, that Russian strategic interests were 
adequately safeguarded when the northern route was aban¬ 
doned by the Black Sea Basin Agreement of 1900. So 
far from decreased difficulties of Turkish mobilization 
constituting a menace to Russia,. “Russia still had both 
the power and, apparently, the inclination to be a formid¬ 
able menace to Turkey.” 37 How could the Colossus of 
the Caucasus tremble before the Sick Man ! 

One French writer was frank in advocating that France 
should pursue a course independent of Russia in this 
instance. “The St. Petersburg press,” he wrote, “has 
asserted vehemently that we are unjust to support an enter¬ 
prise which will injure considerably the economic interests 
of Russia, which will seriously prejudice its grain trade, 
and create a ruinous competitor to Russian railways now 
projected. Of what use is the Franco-Russian Alliance 
if our policy runs counter to Russian interests? 

“We are particularly pleased to answer the question. 
The Franco-Russian Alliance does not imply complete 
servility on the part of France toward Russia, or annihila¬ 
tion of all free will, or perpetual agreement on matters of 
finance. After having furnished our ally with almost 
seven billion francs, we find ourselves called upon to 
support her policies in the Far East, although we our¬ 
selves were abandoned and isolated in the Fashoda affair. 
It will be well for us now to think of ourselves somewhat, 
although respecting scrupulously, even cordially, the 
clauses of the contract of alliance. . .. It is in our own 
interests to cooperate with Germany in the Bagdad enter¬ 
prise. It is extremely regrettable that we cannot carry 
it out ourselves; but since it is otherwise, we should make 
the most of the conditions.” 38 

It is said that M. Delcasse, French Minister of Foreign 
Affairs, certainly no friend of German imperial designs, 
never really was hostile to the Bagdad Railway and its 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 169 

affiliated enterprises. As Bismarck welcomed French 
colonial activities in Africa and China as a means of 
diverting French attention from the Rhine and the 
Vosges, so Delcasse hoped that the colossal Bagdad plan 
would absorb all German imperial inclinations, leaving 
Morocco an exclusive sphere of French influence. In 
the construction of railways in the Ottoman Empire, Ger¬ 
many might satisfy her “irresistible need for expansion,” 
without menacing vital French interests. And all the 
while the Quai d’Orsay, through the French representa¬ 
tives on the Board of Directors of the Bagdad Railway 
Company, could be kept fully informed of the progress 
of the German concessionaires and the purpose of the 
German diplomatic agents interested in the success of the 
project. 39 

There were other ardent French nationalists who felt 
very much the same way about it. However, in their 
opinion, it would be unwise to gamble on the complete 
absorption of Germany in her Bagdadbahn. It would be 
wiser, perhaps, to withhold financial support until such 
time as the German Foreign Office was willing to execute 
a formal treaty conferring upon France an exclusive sphere 
of interest in Morocco. Bagdad was to be had for the 
asking—but in exchange for Morocco! It is said that in 
1905, after the fall of Delcasse and on the eve of the 
Algeciras Conference, M. Rouvier, Prime Minister of 
France, approached the German ambassador in Paris with 
a view to negotiating a Franco-German agreement grant¬ 
ing Germany a free hand in Turkey in return for recog¬ 
nition of the special interests of France in Morocco. 40 

M. Andre Tardieu revived this suggestion two years 
later. “Germany needs capital,” he said. “And when 
one needs capital, it is to France that one comes in search 
of it. It is inevitable, necessary, therefore, that Germany 
come to us. She will be obliged to come to us sooner or 


170 


THE BAGDAD RAILWAY 


later to seek our capital for the Bagdad enterprise. Ger¬ 
many has the concession. She has commenced the lines. 
But all the sections requiring the greatest engineering 
skill are still to be constructed, and she has not the money 
to construct them.” If France agrees to let Germany 
have the necessary funds, it will be 011 the condition that 
Germany allow France important compensations. “Where 
will these compensations be sought ? I have no hesitation 
in saying, in Morocco. The Act of Algeciras must be set 
aside, and France must have a free hand in Morocco! 
An agreement upon the Bagdad question would be mis¬ 
chievous if it concerned Bagdad alone, for, the Germans 
having the concession in their pockets, the positions of the 
negotiators would not be equal. On the other hand, if 
the agreement is for two purposes, if it refers to Bagdad 
and Morocco, I believe, I repeat, it would be both prac¬ 
ticable and desirable.” 41 

The proposal that French consent to the Bagdad Rail¬ 
way could be purchased with compensations in North 
Africa met with no enthusiasm in Germany. Herr Bas- 
sermann, leader of the National Liberals in the Reichstag, 
urged the Foreign Office to meet any such diplomatic 
maneuver on the part of France with a sharp rebuff. 42 
At the time of the Agadir crisis, furthermore, Baron 
Marschall von Bieberstein is said to have warned Beth- 
mann-Hollweg that Germany would have to stand firm 
on Morocco, for “if, notwithstanding Damascus and 
Tangier, we abandon Morocco, we lose at one blow our 
position in Turkey, and with it the advantages and pros¬ 
pects for the future which we have acquired painfully by 
years of toil.” 43 

It was not until 1914 that an agreement was reached 
between France and Germany on Asiatic Turkey. For 
more than ten years, then, the Bagdad Railway was a 
stinging irritant in the relations between the Republic and 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 171 

the Empire. It aggravated an open wound which needed, 
not salt, but balm. We shall return later to consider its 
consequences. But in the meantime we must turn our 
attention to Great Britain, standing astride the Persian 
Gulf and blocking the way. 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 Regarding Russian railways in the Near East cf. the article 
“Russia—Railways,’’ in the Encyclopedia Britannica, nth edition, 
Volume 23, p. 891. The trans-Persian railway from Resht, a 
Persian port on the Caspian, to Teheran was completed in 
September, 1899. Cf. “Russia’s Tightening Grip on Persia,” in 
The Globe (London), August 24, 1899; also “Russian Railways 
in Asia,” The Financial News (London), August 14, 1899. The 
Bagdad Railway frequently was referred to in the French and 
Russian press as the Petit Transasiatique. 

3 Foreign correspondence of The Globe, July 28, 1899; Com¬ 
merce (London), August 2, 1899; articles quoted from the Novoe 
Vremya in The Globe, August 10, 1899; The Engineer (London), 
August 11, 1899; The Observer, August 13, 1899; R. Henry, 
“L’interet franqaise en Asie occidentale—Le chemin de fer de 
Bagdad et l’alliance franco-russe,” in Questions diplomatiques 
et coloniales, Volume 15 (1903), pp. 673-688. 

3 Corps de droit ottoman, Volume IV, pp. 64 et seq.; Paul 
Imbert, “Le chemin de fer de Bagdad,” in Revue des deux 
mondes, 5 period, Volume 38 (1907), PP- 657-659. 

4 Quoted by*Georges Mazel, Le chemin de fer de Bagdad (Mont¬ 
pelier, 1911), p. 324. It should be remembered that Russia at 
this time was experiencing the Industrial Revolution. Cf. James 
Mavor, An Economic History of Russia, Volume II (Toronto, 
1914), Book VI. 

0 Annual Register, 1902, p. 323; 1903, pp. 293-294. 

9 Memoirs of Count Witte, edited and translated by A. Yar- 
molinsky (Garden City, 1921), pp. 75 et seq.; G. Drage, Russian 
Affairs (London, 1904), pp. 507 et seq.; A. Sauzede, “Le 
developpement des voies ferrees en Russie,” in Questions diplo¬ 
matiques et coloniales, Volume 37 (1914), pp. 272-281; F. H. 
Skrine, The Expansion of Russia (Cambridge, 1904), passim. 

1 Bohler, loc. cit., pp. 294-295; Gervais-Courtellemont, “La 
question du chemin de fer de Bagdad,” in Questions diplo¬ 
matiques et coloniales, Volume 23 (1907), pp. 499-507- 

8 Baron S. A. Korff, Russia s Foreign Relations during the 
Last Half Century (New York, 1922), pp. I33-I34- 


172 


THE BAGDAD RAILWAY 


0 Rohrbach, Die Bagdadbahn, pp. 10-13; Imbert, loc. cit., p. 678. 
Enthusiastic Turks believed that, with adequate rail communi¬ 
cations, Erzerum might be transformed into a Turkish Belfort. 
Cf. Mazel, op. cit., p. 37. Had the Bagdad Railway and the 
projected railways of northern Anatolia been completed before 
the outbreak of the Great War, the Turks could have made a 
more effective defence in the Caucasus campaign of the Grand 
Duke Nicholas in 1916. 

10 For a general statement of the attitude of Russia and the 
Balkan States to the Bagdad Railway cf. Alexandre Ilitch, Le 
chemin de fer de Bagdad, ou l’expansion de I’Allemagne en 
Orient (Brussels, Paris, Leipzig, 1913), pp. 100-107, 121-123. 

“Bohler, loc. cit., pp. 273-289; cf., also, P. Rohrbach, German 
World Policies, pp. 223-224. 

“ Supra, pp. 59-60. 

13 Cheradame, op. cit., pp. 267 et seq.; The Times, August 10, 
1899; K. Helfferich, Die Vorgeschichte des Weltkrieges, p. 124. 

M Journal Ofhciel, Debats parlementaires, Chambre des 
Deputes, March 25, 1902, p. 1468. 

“According to M. Deschanel, this was sophistry. The French 
Government, if it was not guilty of an error of commission, 
certainly was guilty of a sin of omission. It was the opinion 
of M. Deschanel that the French Ambassador at Constantinople 
should have done something to put the French Government on 
record as opposed to the Bagdad Railway. M. Deschanel was 
not certain, however, that the French Ministry had not consented 
to the participation of French capital in the plan. “How can 
one imagine,” he said, “that an institution such as the Ottoman 
Bank became involved in an enterprise of such great political 
and military importance without the approval of our Foreign 
Office? . . . How is it that the Ottoman Bank is a party to this 
enterprise, and how is it that the Board of Directors for the 
first section of the line has French representatives, when only a 
word from the Government could have prevented it?” Ibid., 
November 20, 1903, p. 2798. 

“ Ibid., March 25, 1902, pp. 1468 et seq. 

17 Victor Berard, “Le Discours du Chancelier,” in the Revue de 
Paris, December 15, 1906. 

18 The Revue Bleue, April 6, 1907, p. 429; Syria and Palestine. 
p. 126. Many of the claims that the Bagdad Railway jeopardized 
French prosperity were purely fantastic. It was maintained that 
the opening of the great Mesopotamian granary would cripple 
French agriculture, already seriously handicapped by the com¬ 
petition of the new world. To this was added the suggestion 
that development of cotton-growing in Turkey would stifle the 
infant efforts at the cultivation of cotton in the French colonies. 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 173 

It is incredible that Mesopotamian grain and cotton would have 
interfered with the flourishing prosperity of the French peas¬ 
antry ; in any event, any such danger was at least a generation 
removed. France raised high tariff barriers against foreign com¬ 
petition in the home market for agricultural products; she was 
not an exporter of grain. 

18 Journal Off del, Debats parlementaires, Chambre des Deputes, 
March 25, 1902, pp. 1467 et seq. 

20 Cf., M. Montbel, “Les puissances coloniales devant l’lslam,” 
in Questions diplomatiques et coloniales. Volume 37 (1914), pp. 
348-362. 

21 Journal Officiel, Debats parlementaires, Chambre des Deputes, 
November 20, 1905, p. 2798. The italics are mine. 

22 Revue des deux mondes. Volume 149 (1898), p. 29. 

33 Sources of the treaties granting special privileges to France 
are ^sighted in Note 3, Chapter II. Regarding the origins and 
nature~cff the French protectorate over Roman Catholic missions 
see the article “Capitulations” in the Encyclopedia Britannica, 
previously cited; J. Brucker, “The Protectorate of Missionaries 
in the Near East,” in the Catholic Encyclopedia, Volume XII, 
pp. 488-492; A. Schopoff, Les Reformes et la Protection des 
Chretiens en Turquie, 1673-1904 (Paris, 1904) ; Livre de propa- 
gande de dalliance frangaise, 1883-1893 (Paris, 1894), especially 
PP- 35 et seq. ; Viscomte Aviau de Piolant, La defense des 
interets catholiques en Terre Sainte et en Asie Mineure (Paris, 
1886). 

24 Syria and Palestine, pp. 43-45, 54 - 551 L. Brehier, “Turkish 
Empire—Missions,” in Catholic Encyclopedia, Volume XV, pp. 
101-102; J. Atalla, “Les solutions de la question syrienne,” in 
Questions diplomatiques et coloniales, Volume 24 (1907), p. 472. 

26 Bulletin de la Chambre de Commerce frangaise de Constant 
tinople, June 30, 1897, pp. 112-113, November 30, 1897, p. 149. 

39 Brucker, loc. cit., p. 490. 

27 It should be added that the Treaty also stipulated that “the 
acquired rights of France are explicitly reserved, and there shall 
be no interference with the statu quo in the Holy Places.” E. 
Hertslet, The Map of Europe by Treaty, Volume IV (London, 
1891), p. 2797. 

28 Rezwe des deux mondes, Volume 149, (1898), pp. 24-25; 
Brucker, loc. cit., p. 491. 

29 Catholic Encyclopedia, Volume XII, p. 491 - The role of the 
Italians in this controversy is of considerable interest. The 
desire of the Italian Government to assert its right to protect 
its own citizens abroad was a manifestation of the Italian 
nationalism which brought about the establishment of the King¬ 
dom ; at the same time it was an expression of that anti-Clerical 



174 


THE BAGDAD RAILWAY 


tendency which characterized Italian politics from the days of 
Cavour to the outbreak of the Great War. Undoubtedly, also, 
there was an economic side to the question. It will be recalled 
that Italian trade with the Ottoman Empire grew more rapidly 
than that of any other power after the opening of the twentieth 
century. (Supra, pp. 105-106.) This growth was due, in no small 
degree, to the earlier rise of Italian missionary activity in Turkey. 
This growth of missions and schools, as well as of commercial 
establishments, was irritating to patriotic Frenchmen. Cf. two 
articles by Rene Pinon, “Les ecoles d’Orient,” in Questions diplo- 
matiques et coloniales, Volume 24 (1907), pp. 4 I 5 “ 435 » 487-5 r 7* 
Italian missionaries, charged M. Pinon, were encouraged in every 
way to ignore the French protectorate, appealing only to Italian 
diplomatic and consular representatives. “Official Italy, Catholic 
and papal Italy, free-mason Italy and clerical Italy, all are work¬ 
ing together in a common great patriotic effort for the spread 
of the Italian language and the rise of the national power” 
(p. 500). Annoying as this is, says M. Pinon, it should be “a 
singular lesson for certain Frenchmen!” That there was no 
love lost on the Italian side of the controversy may be gathered 
from an analysis of the Italian press comments which appeared 
in Questions diplomatiques et coloniales, Volume 37 (1914), p. 
495 - 

80 Brucker, loc. cit., p. 491. Inasmuch as the protectorate of 
Catholic missions involved a considerable responsibility for 
France, one may ask why the French Government should have 
been so solicitous that no other nation be allowed to share the 
burden. The answer is suggested by the Catholic Encyclopedia, 
which states that the system of religious protectorates is almost 
invariably subject to the abuse that “the protectors will seek 
payment for their services by trammeling the spiritual direction 
of the mission or by demanding political services in return.” 
Volume XII, p. 492. 

81 Supra, pp. 134 - 135 . 

82 Revue dcs deux mondes, Volume 149 (1898), p. 39. The 
“pro-German party” was said to consist of Cardinals Ledochow- 
ski, Hohenlohe, Galimberti, and Kapp. Ibid., pp. n-12; Reinsch, 
op. cit., p. 269. 

33 Revue des deux mondes, Volume 149 (1898), pp. 36-40. On 
this whole subject see, also, C. Lagier, Byzance et Stamboul: nos 
droits frangaises et nos missions en Orient (Paris, 1905) ; Hilaire 
Capuchin, La France Catholique en Orient durant les trois- 
derniers siccles (Paris, 1902) ; A. Schopoff, Les Reformes et la 
Protection des Chretiens en Turquie (Paris, 1904). 

84 G. Saint-Yves, Les Cliemins de fer frangaises dans la Turquie, 
(TAsie (Paris, 1914). 


RUSSIA RESISTS AND FRANCE IS UNCERTAIN 175 

“The French and Belgian banks principally interested were: 
the Imperial Ottoman Bank, the Banque de 1 ’Union Parisienne, 
and the Banque Internationale de Bruxelles. Cf. article “Ou en 
est la question du chemin de fer de Bagdad,” in Questions diplo- 
matiques et coloniales, Volume 24 (1907), pp. 167-171; E. Letail- 
leur, Les capitalistes frangais contre la France (Paris, 1916), pp. 
72-110. M. Rouvier visited Turkey in 1901, at the request of 
the Ottoman Public Debt Administration, to suggest improve¬ 
ments in the fiscal system of the Empire. ( Corps de droit 
ottoman. Volume IV, p. no.) It was at this time, probably, 
that he learned enough of the Bagdad Railway to persuade him 
of the wisdom of investing in its securities. 

3a Gervais-Courtellemont, loc. cit., p. 507; Imbert, loc. cit., p. 
682. 

87 Gervais-Courtellemont, loc. cit., p. 507; Bohler, loc. cit., p. 294. 

88 Bohler, loc. cit., pp. 293-295. 

39 Mazel, op. cit., pp. 315-322. 

*K. Helfferich, Die deutsche Tiirkenpolitik, p. 18. 

41 “La politique exterieure de rAllemagne,” in Questions diplo- 
matiques et coloniales, Volume 23 (1907), pp. 340-341. 

43 Stenographische Berichte, XII Legislaturperiode, 1 Session, 
Volume 231 (1908), pp. 4226 et seq. 

"Quoted by the Annual Register, 1913, p. 326. 


CHAPTER VIII 


GREAT BRITAIN BLOCKS THE WAY 
Early British Opinions Are Favorable 

The idea of a trans-Mesopotamian railway was not new 
to informed Englishmen. As early as 1831 a young Brit¬ 
ish army officer, Francis R. Chesney, who had seen service 
in the Near East, became impressed with the desirability 
of constructing a railway from the Mediterranean to the 
Persian Gulf. From 1835 to 1837—while Moltke was 
in Turkey studying military topography—Chesney was 
engaged in exploring the Euphrates Valley and upon his 
return to England brought glowing tales of the latent 
wealth of ancient Babylonia. It was not until twenty 
years later, however, that his plan for a Mesopotamian 
railway was taken up as a practical business proposition. 
In 1856 Sir William Andrew incorporated the Euphrates 
Valley Railway Company, appointed General Chesney as 
chief consulting engineer, and opened offices at Con¬ 
stantinople to carry on negotiations for a concession from 
the Imperial Ottoman Government. The plans of the 
Company were supported enthusiastically by Lord Palm¬ 
erston, by Lord Stratford de Redcliffe, British am¬ 
bassador at Constantinople, and by the Turkish 
ambassador in London. The following year the Sultan 
granted the Euphrates Valley Company a concession for 
a railway from the Gulf of Alexandretta to the city of 
Basra, with the understanding that the Ottoman Treasury 
would guarantee a return of six per cent upon the capital 
invested in the enterprise. The promoters, however, ex- 

176 


GREAT BRITAIN BLOCKS THE WAY 


177 


perienced difficulty in raising funds for the construc¬ 
tion of the line, and the project had to be abandoned. 1 

Lord Palmerston, in the meantime, was busily oppos¬ 
ing the Suez Canal project. De Lesseps was handicapped 
by the obstructionist policies of British diplomacy as well 
as by the unwillingness of British financiers to invest in 
his enterprise. Palmerston frankly informed the great 
French engineer that in the opinion of the British Gov¬ 
ernment the construction of the Canal was a physical 
impossibility; that if it were constructed it would injure 
British maritime supremacy; and that, after all, it was 
not so much a financial and commercial venture as a 
political conspiracy to provide the occasion for French 
interference in the East! 2 

Nevertheless the Suez Canal was completed in 1869, 
and immediately thereafter the question of a Mesopo¬ 
tamian railway was again brought to the fore in England. 
The advance of the Russians in the Near East and the 
control by the French of a short all-water route to the 
Indies gave rise to serious concern regarding the main¬ 
tenance of communication with British India. I11 1870 
a British promoter proposed the construction of a rail¬ 
way from Alexandretta via Aleppo and Mosul to Bagdad 
and Basra. Such a railway, as Sir William Andrew had 
pointed out, would assure the undisturbed possession of 
India, for the “advancing standard of the barbarian Cos¬ 
sack would recoil before those emblems of power and 
progress, the electric wire and the steam engine, and his 
ominous tread would be restrained behind the icy barrier 
of the Caucasus.” 3 Also it would render Great Britain 
independent of the French-owned Suez Canal by provid¬ 
ing an alternative route to the East, making possible more 
rapid transportation of passengers, mails, and troops to 
India. This plan seemed desirable of execution from 
50 many points of view that a special committee of the 


178 


THE BAGDAD RAILWAY 


House of Commons, presided over by Sir Stafford North- 
cote, was appointed “to examine and report upon the 
whole subject of railway communication between the 
Mediterranean, the Black Sea, and the Persian Gulf.” 
This committee reported that the construction of a trans- 
Mesopotamian railway was a matter of urgent imperial 
concern and recommended a plan which would have in¬ 
volved the investment of some £10,000,000. The necessity 
of providing an alternative route to India was obviated, 
however, by Disraeli’s purchase, in 1875, of a controlling 
interest in the Suez Canal at a cost of less than half that 
sum. 4 

For the forty years during which, at intervals, these 
projects were under discussion Germany was not even an 
interested spectator in Near Eastern affairs. Domestic 
problems of economic development and national unifica¬ 
tion were all-absorbmg, and capitalistic imperialism was 
quite outside the scope of German policies. France and 
Russia, not Germany, were the disturbers of British tran¬ 
quillity in the Orient. 

When during the last two decades of the nineteenth 
century there was a marked increase of German political 
and economic interests in the Ottoman Empire, there was 
little disposition in England to resent the German advance. 
As late as 1899, the year in which the preliminary Bagdad 
Railway concession was awarded to German financiers, 
British opinion, on the whole, was well disposed to Teu¬ 
tonic peaceful penetration in the Near East. The press 
was delighted at the prospect that the advent of the Ger¬ 
mans in Turkey would block Russian expansion in the 
Middle East. Such eminent imperialists as Joseph Cham¬ 
berlain and Cecil Rhodes announced their willingness to 
conclude an entente with Germany in colonial affairs. The 
British Government was more suspicious of France than 
of Germany. 5 


GREAT BRITAIN BLOCKS THE WAY 


179 


During the opening years of the twentieth century, 
however, the situation was materially changed. Although 
there was a continuance of the cordial relations between 
the British and German Governments, there was an under¬ 
current of hostility to Germany in England (as well as to 
England in Germany) which was to be disastrous to the 
hopes for an Anglo-German agreement on the Near East. 
By 1903, the year of the definitive Bagdad concession, 
German diplomacy and German business were under a 
cloud of suspicion and unpopularity in Great Britain. 

The underlying reason for the increasing estrange¬ 
ment between England and Germany was, as far as the 
British were concerned, the phenomenal rise of Germany 
as a world power. The commercial advance of the Ger¬ 
man Empire disturbed the complacent security and the 
stereotyped methods of British business. The colonial 
aspirations of German imperialists rudely interfered with 
British plans in Africa and appeared to be threatening 
British domination of the East. The German navy bills 
of 1898 and 1900 constituted a challenge to Britannia’s 
rule of the waves. German criticism of English pro¬ 
cedure in South Africa had aroused widespread animosity, 
in large part because the British themselves realized that 
their conduct toward the Boers had not been above re¬ 
proach. This animosity was revealed in an aggravated 
and unreasoning form in the vigorous denunciation which 
greeted the Government’s joint intervention with Ger¬ 
many in the Venezuela affair of 1902. Joseph Chamber- 
lain, who in 1899 had advocated an Anglo-German alliance, 
in 1903 was preaching “tariff reform,” directed, among 
other objectives, against the menace to the British Empire 
of the rising industrial prosperity of Germany. The 
proposal that British capital should participate in the 
Bagdad Railway project was introduced to the British 
public at a distinctly inopportune time from the point of 


i8o 


THE BAGDAD RAILWAY 


view of those who desired some form of cooperation be¬ 
tween England and Germany in the successful prosecution 
of the plan. 

The British Government Yields to Pressure 

The Bagdad Railway came up for discussion in Par¬ 
liament on April 7, 1903. Mr. Balfour then informed the 
House of Commons that negotiations were being car¬ 
ried on between British and German capitalists, and 
between British capitalists and the Foreign Office, for the 
purpose of determining the conditions upon which British 
financiers might participate in the enterprise. If a satis¬ 
factory agreement could be reached by the bankers, His 
Majesty’s Government would be asked to give its consent 
to a reasonable increase in the customs duties of the 
Ottoman Empire, to consider the utilization of the new 
railway for the transportation of the Indian mails, and 
to adopt a friendly attitude toward the establishment of 
the eastern terminus of the Bagdad Railway at or near 
Koweit. 

Cooperation with the German concessionaires on any 
such basis was attacked vigorously from the floor of the 
House. One member declared it a menace to the existing 
British-owned Smyrna-Aidin Railway lines in Turkey, 
a potential competitor of British maritime supremacy, and 
a threat at British imperial interests in Egypt and in the 
region of the Persian Gulf. Another member of the 
House believed that “it was impossible to divorce the 
commercial from the political aspect of the question. What 
made the House take a real, live interest in it was the 
feeling that bound up with the future of this railway there 
was probably the future political control of large regions 
in Asia Minor, Mesopotamia, and the Persian Gulf.” 
Another member was certain the House “knew Mesopo- 


GREAT BRITAIN BLOCKS THE WAY 181 


tamia was a blessed word. They all felt it was impossible 
for this country to oppose the introduction of a railway 
through Mesopotamia. The only wonder was that the 
railway was not constructed forty or fifty years ago.” 
At the same time, he felt, it would be well for Britain to 
be assured that her participation in the enterprise would 
not lead to another “Venezuela agreement”; Germany 
must be given to understand that Britain, by control of 
the Persian Gulf, held the “trump card” of the deck. 

The Prime Minister made it plain, nevertheless, that he 
favored cooperation with the German concessionaires pro¬ 
vided British capital were permitted to participate on a 
basis of equality with any other power. He believed, also, 
that an obstructionist policy would be futile. “I have no 
doubt that whatever course English financiers may take 
and whatever course the British Government may pursue, 
sooner or later this great undertaking will be carried out,” 
said Mr. Balfour. “It is undoubtedly in the power of the 
British Government to hamper and impede and incon¬ 
venience any project of the kind; but that the project will 
ultimately be carried out, with or without our having a 
share in it, there is no question whatsoever.” 

“There are three points,” continued Mr. Balfour, “which 
ought not to be lost sight of by the House when trying 
to make up their minds upon this problem in its incom¬ 
plete state. They have to consider whether it is or is 
not desirable that what will undoubtedly be the shortest 
route to India should be entirely in the hands of French 
and German capitalists. Another question is whether 
they do or do not think it desirable that if there is a trade 
opening in the Persian Gulf, it should be within the terri¬ 
tories of the Sheik whom we have under our special pro¬ 
tection and with whom we have special treaties [i.e., the 
Sheik of Koweit], or whether it should be in some other 
port of the Persian Gulf where we have no such prefer- 


THE BAGDAD RAILWAY 


182 

ential advantage. The House must also have, in view a 
third consideration with regard to a railway which goes 
through a very rich country and which ... is likely after 
a certain period of development to add greatly to the riches 
of Turkey, and indirectly, I suppose, greatly to the riches 
of any other country which is ready to take advantage of 
it. Whether the British producer will be able to take 
advantage of it is not for me to say; but the House will 
have to consider whether he is more likely to be able to 
take advantage of it if English capital is largely inter¬ 
ested, than if it is confined to French and German capital. 
The House will have to calculate whether ... it will be 
prudent to leave the passenger traffic in the hands of those 
two nations, France and Germany, with whom we are on 
the most friendly terms, but whose interests may not be 
identical with our own.” 6 

Mr. Balfour’s presentation of the case was hailed in 
Berlin as eminently lucid and fair. The National Zeitung 
and the Vossische Zeitung of April 8 expressed the hope 
that British participation in the Bagdad Railway would 
be approved by Parliament and the press, in order that 
the German promoters might have the opportunity to 
demonstrate that no political ambitions were connected 
with the enterprise. The Russian attitude of refusing 
even to discuss internationalization, on the other hand, 
was roundly denounced. 

The London press, however, saw no reason for enthu¬ 
siasm over the Prime Minister’s proposal. The Times, 
the Daily Mail, the Daily Telegraph, the Pall Mall Gazette, 
and the National Review let loose a torrent of vituperation 
against German imperialist activities in general and the 
Bagdad Railway in particular. The Spectator, forswear¬ 
ing any thought of prejudice against Germany, constantly 
reminded its readers of German unfriendliness during the 
Boer War and suggested that the Bagdad negotiations 


GREAT BRITAIN BLOCKS THE WAY 183 


offered the British Government an admirable opportunity 
to retaliate. 

The Manchester Guardian, organ of the old Liberalism, 
likewise was opposed to British participation in the Bag¬ 
dad Railway. Pleading for continued observance of 
Britain’s time-honored policy of isolation, its leading edi¬ 
torial of April 15 said: “Mr. Balfour expressed his belief 
that ‘this great international artery had better be in the 
hands of three great countries than in the hands of two 
or of one great country.’ In other words, England is to be 
mixed up in the domestic broils of Asia Minor; every 
Kurdish or Arab attack on the railway will raise awkward 
diplomatic questions, and any disaster to the Turkish mili¬ 
tary power will place the whole enterprise in jeopardy. 
What is far more important, English participation in 
railway construction in Asia Minor will certainly 
strengthen the suspicions which Russia entertains re¬ 
garding our policy. It is the fashion with certain English 
politicians to abuse Russia for building railways in Man¬ 
churia and for projecting lines across Persia. Yet Mr. 
Balfour seems more than half inclined to pay her policy 
the compliment of imitation by helping to build a railway 
across Mesopotamia to the Persian Gulf—and, worse still, 
of imperfect imitation, since the Government is certainly 
not prepared to occupy the territory through which the 
railway will pass, as Russia does in Manchuria. What 
vital interests of our own shall we strengthen by this 
sudden ardour for railways in Turkey to counterbalance 
the certain weakening of our friendly relations with 
Russia ?” 

Violent as was the opposition of the press to any 
cooperation with the Germans in the Bagdad Railway, the 
opposition would have been still more violent had all of 
the facts been public property. Mr. Balfour, however, 
was keeping the House and the country in complete igno- 


184 


THE BAGDAD RAILWAY 


ranee of many of the most important aspects of the 
situation. Although the Prime Minister denied that there 
had been any negotiations between the British and German 
Governments regarding the Bagdad enterprise, he failed 
to admit that there had been such negotiations between 
Plis Majesty’s Government and German financiers. He 
made no mention of the fact, for example, that he and 
Lord Lansdowne, his Secretary of State for Foreign 
Affairs, had attended a meeting at the home of Lord 
Mount Stephen at which Dr. von Gwinner, on behalf of 
the Deutsche Bank, and Lord Revelstoke, on behalf of the 
interested British financiers, explained the terms of the 
proposed participation of British capital in the Bagdad 
Railway. 7 The plan was to place the Railway, including 
the Anatolian lines, throughout its entire length from the 
Bosporus to the Persian Gulf, under international control. 
Equal participation in construction, administration, and 
management was to be awarded German, French, and 
British interests to prevent the possibility of preferential 
treatment for the goods or subjects of any one country. 8 
To this proposal both Mr. Balfour and Lord Lansdowne 
gave their approval, assuring the bankers that no diplo¬ 
matic obstacles would be offered by Great Britain to the 
construction of the Bagdad Railway. Dr. von Gwinner 
thereupon returned home to obtain the consent of his 
associates to the reapportionment of interests and, per¬ 
haps, to consult the German Foreign Office and the Otto¬ 
man minister at Berlin. This was early in April, 1903. 9 

Persistent rumors in the London press that a Bagdad 
Railway agreement had been negotiated brought the sub¬ 
ject to the attention of the Cabinet, which heretofore, 
apparently, had not been consulted by the Prime Minister 
and the Secretary of State for Foreign Affairs. It was 
decided that the Prime Minister should make a statement 
to Parliament—a statement which, perhaps, might serve 


GREAT BRITAIN BLOCKS THE WAY ' 185 

as a sort of trial balloon to ascertain the opinion of the 
country upon the question. Mr. Balfour’s presentation 
of the Bagdad Railway affair to the House of Commons, 
as we have seen, however, provoked unfriendly comments 
from the floor and was subjected to heavy fire from the 
press. Thereupon a rebellious element in the Cabinet— 
led, presumably, by Joseph Chamberlain, who now was 
more interested in the development of the economic re¬ 
sources of the British Empire under a system of protec¬ 
tive and preferential tariffs, than in cooperation with 
other nations—persuaded Mr. Balfour not to risk the life 
of his Ministry on the question of British participation 
in the Bagdad enterprise. Accordingly, the agreement 
with the Deutsche Bank was repudiated, and on April 23, 
1903, Mr. Balfour informed the House of Commons that 
His Majesty’s Government was determined to withdraw 
all support, financial and otherwise, which Great Britain 
might be in a position to lend the Bagdad Railway. He 
was convinced, he said, after a careful examination of the 
proposals of the German promoters, that no agreement 
was possible which would compensate the Empire for its 
diplomatic assistance and guarantee security for British 
interests. 10 

This announcement was a distinct disappointment to 
the bankers in Berlin and in London. The directors of 
the Deutsche Bank were stunned by the termination of 
negotiations which they believed had been progressing 
satisfactorily. The British financiers were chagrined at 
the sudden decision of their Government to oppose their 
participation in a promising enterprise. They were con¬ 
vinced that the terms offered by the German bankers met 
every condition imposed by the Prime Minister. They 
were agreed on the wisdom of British cooperation with 
the Deutsche Bank, and they were not a little annoyed at 
what appeared to be bad faith on the part of Downing 


THE BAGDAD RAILWAY 


186 

Street. They were convinced that only a bellicose press 
frustrated the attempt to make the Bagdad Railway an 
international highway. 11 

This, in any event, is the diagnosis of the situation 
furnished by Sir Clinton Dawkins, of the Morgan group, 
one of the British financiers interested in the project. In 
a letter to Dr. von Gwinner written on April 23, 1903, 
but not made public until six years later, he said, “As you 
originally introduced the Bagdad business to us, I feel that 
I cannot, upon its unfortunate termination, omit to express 
to you personally my great regret at what has occurred. 
After all you have done to meet the various points raised, 
you will naturally feel very disappointed and legitimately 
aggrieved. But I am glad to think, and I feel you will be 
convinced, that your grievance lies not against the British 
group but against the British Foreign Office. The fact 
is that the business has become involved in politics here 
and has been sacrificed to the very violent and bitter feel¬ 
ing against Germany exhibited by the majority of our 
newspapers, and shared in by a large number of people. 
This is a feeling which, as the history of recent events will 
show you, is not shared by the Government or reflected 
in official circles. But of its intensity outside these circles, 
for the moment, there can be no doubt; at the present 
moment cooperation in any enterprise which can be rep¬ 
resented, or I might more justly say misrepresented, as 
German will meet with a violent hostility which our 
Government has to consider.” 

Sir Clinton thereupon asserted that the effort of Mr. 
Balfour to quiet the uproar in Parliament was due to 
the Prime Minister’s complete satisfaction with the agree¬ 
ment reached by the financiers. Just as success seemed 
assured, a bitter attack was launched on the Government 
“by a magazine and a newspaper [The National Review 
and The Times] which had made themselves conspicuous 


GREAT BRITAIN BLOCKS THE WAY 187 

by their criticisms of the British Foreign Office on the 
Venezuela affair. Who instigated these papers, from 
whence they derived their information, is a matter upon 
which I cannot speak with certainty. My own impression 
is that the instigation proceeded from Russian sources. 
The clamour raised by these two organs was immediately 
taken up by practically the whole of the English press, Lon¬ 
don having really gone into a frenzy on the matter owing 
to the newspaper campaign, which it would have been 
quite impossible to counteract or influence. It is, I think, 
due to you that you should know the histoire intime of 
what has passed/’ 12 

There was only one London newspaper, the St. James's 
Gazette, which came out frankly in favor of British par¬ 
ticipation in the Bagdad Railway. In the issue of April 
14, 1903, the editor ridiculed the suggestion of the Spec¬ 
tator that the Foreign Office was obliged to warn bankers 
of the financial risks involved in the enterprise. “Why 
our contemporary should be so anxious to save financiers, 
British or foreign, from making a bad investment of their 
money, we cannot imagine. Financiers are generally 
pretty wide-awake, and the City as a rule requires no 
advice from Fleet Street, the Strand, or Whitehall in 
transacting its business.” In an editorial entitled “Bagdad 
and Bag Everything,” April 22, 1903, the Gazette con¬ 
demned The Times for the “curious and alarmist deduc¬ 
tions” which that journal drew from the terms of the 
Bagdad Railway convention. The suggestion that this 
was a deliberate attempt on the part of Germany to ruin 
British trade was characterized “as much a figment of a 
fevered imagination as the mind-picture of Turkey using 
This enormous line to pour down troops to reduce the 
shores of the Persian Gulf to the same happy condition 
as Armenia and Macedonia,’ about which The Times is 
so suddenly and unaccountably concerned. The concession 


THE BAGDAD RAILWAY 


188 

is a monument to the German Emperor’s activity, built 
on the ruins of the influence which we threw away, and we 
do not precisely see what our locus standi in the matter is. 
If the interests of the Ottoman Government and of the 
German concessionaires be served by the construction of 
the line, constructed the line will be, and there’s an end. 
Whether it ever will, or ever can pay its way, is the 
affair only of capitalists who are contemplating investment 
in it. It is not the slightest use barking when we cannot 
bite, and our power of biting in the present instance is 
excessively small. . . . The Emperor William, like Jack 
Jones, has ‘come into ’is little bit of splosh’ in Asia 
Minor, and it is quite useless to be soreheaded about it. 
It is childish to be ever carping and nagging and ‘panick¬ 
ing.’ We question whether the Bagdad Railway—while 
the rule of the Sultan endures—is going to do much good 
or much harm to anybody. The vision which some Ger¬ 
mans have of peaceful Hans and Gretchen swilling 
Ldwenbrau in the Garden of Eden to the strains of a 
German band, is little likely of fulfilment. If trade de¬ 
velops, a fair share of it will come our way, provided 
we send good wares and such as the inhabitants want to 
buy.” This minority opinion, however, was unheeded in 
the outburst of anti-German feeling which followed Mr. 
Balfour’s first statement to the House of Commons. 

As events turned out, the failure of the Balfour Gov¬ 
ernment to effect the internationalization of the Bagdad 
Railway was a colossal diplomatic blunder. If the pro¬ 
posed agreement of 1903 had been consummated, the en¬ 
tente of 1904 between France and England would have 
taken control of the enterprise out of the hands of the 
Germans, who would have possessed, with their Turkish 
collaborators, only fourteen of the thirty votes in the 
Board of Directors. Sir Henry Babington Smith assures 
the author that there was nothing in the arrangement sug- 


GREAT BRITAIN BLOCKS THE WAV 189 

gested by the Deutsche Bank which would have prevented 
eventual Franco-British domination of the line. Surely, as 
Bismarck is said to have remarked, every nation must 
pay sooner or later for the windows broken by its bellicose 
press! 


Vested Interests Come to the Fore 

In addition to the pressure which was brought to bear 
on the Balfour Cabinet by the newspapers, there were im¬ 
portant vested business interests which quietly, but effec¬ 
tively, made themselves heard at Downing Street during 
the critical days of the Bagdad negotiations of 1903. 

It already has been noted that in 1888, as part of the 
plans of the Public Debt Administration for the improve¬ 
ment of transportation facilities in Turkey, the British- 
owned Smyrna-Aidin Railway Company was granted per¬ 
mission to construct several important branches to its main 
line. For a time this new concession thoroughly satisfied 
the owners and directors of the Company, and there was 
no objection on their part to the extension and develop¬ 
ment of the German-owned Anatolian system. By 1903, 
however, when the Bagdad concession was under discus¬ 
sion, the Smyrna-Aidin line demanded the protection of 
the British Government against the undue extension of 
German railways in the Near East. In particular, it ob¬ 
jected to the agreement between the Anatolian Railway 
and the Smyrna-Cassaba Railway, by which the latter 
joined its tracks with the Anatolian system at Afiun Kar- 
ahissar and accepted a schedule of tariffs satisfactory to 
both lines. 13 The Smyrna-Aidin Company feared that 
the Bagdad Railway would develop the ports of Haidar 
Pasha, Alexandretta, and Mersina at the expense of the 
prosperity of Smyrna, thereby decreasing the relative 
importance of the Smyrna-Aidin line and cutting down 


THE BAGDAD RAILWAY 


190 

the volume of its traffic. Finally, it objected to the pay¬ 
ment of a kilometric guarantee to the German conces¬ 
sionaires while there was no likelihood of its being 
similarly favored by the custodians of the public purse. 
The interests of the shareholders of the railway were well 
represented in the House of Commons by “that watchful 
dragon of imperial interests”, Mr. Gibson Bowles. 

_^Mr. Bowles (Conservative member from King’s Lynn, 
1892-1906, and Liberal from the same constituency, 1910- 
1916) was a frank defender of the interests of the stock¬ 
holders of the Smyrna-Aidin Railway. He believed that 
investors were entitled to governmental protection of 
their investments, whether at home or abroad. He left 
no doubt, however, that he took his stand on high grounds 
of patriotism as well. He informed the House that “he 
did not object to the railway, because all railways were 
good feeders of ships. But this was not a railway; it 
was a financial fraud and a political conspiracy—a fraud 
whereby English trade would suffer and a conspiracy 
whereby the political interests of England would be threat¬ 
ened. It amounted to a military and commercial occupa¬ 
tion by Germany of the whole of Asia Minor.” 14 

Comparable to the interests of the Smyrna-Aidin Rail¬ 
way were those of the Euphrates and Tigris Navigation 
Company, Ltd. Under this name the Lynch Brothers 
had been operating steamers on the Tigris and the Shatt- 
el-Arab since the middle of the nineteenth century. In 
the trade between Bagdad and Basra they enjoyed a 
practical monopoly. In the absence of competition they 
were able to render indifferent service at exorbitant rates, 
and there was nothing to disturb their tranquillity except 
an occasional complaint from a British merchant. But 
the old order was about to change. The Bagdad Railway 
concession of 1903 (articles 9 and 23) destroyed the mo¬ 
nopoly of the Lynch Brothers by granting to the Railway 



GREAT BRITAIN BLOCKS THE WAY 


191 

Company limited rights of navigation on the Tigris. Con¬ 
struction of the Mesopotamian sections of the Railway, 
furthermore, would be almost certain to kill, by com¬ 
petition, profitable navigation between Bagdad and Basra. 
The course of the Tigris is shallow and winding, subject 
to heavy rises and falls, and constantly changing with the 
formation and disappearance of sand shoals. The river 
journey from Bagdad to Basra is about five hundred miles 
and takes from four to five days by steamer, under favor¬ 
able conditions. The distance by land is about three 
hundred miles and could be traversed by railway in a 
single day’s journey, regardless of weather conditions. 
For passengers and most classes of freight the Bagdad 
Railway promised more economical transportation. The 
Lynch Brothers were determined, however, to resist such 
rude encroachment on their profitable preserves. In de¬ 
fence of their interests they wrapped themselves in the 
Union Jack and called upon their home government for 
protection; they were patriotic to the last degree and were 
determined “that the custody of a privilege highly im¬ 
portant to British commerce would never pass to Germany 
except over the dead bodies of the principal partners.” 15 
Overcharge their countrymen they might; surrender this 
prerogative to a German railway they would not! 

British shipping interests, also, were vigorous in their 
opposition to the Bagdad Railway. A trans-Mesopotamian 
railway, they knew, would absorb some of the through 
traffic to the East, and the competition of the locomotive 
might compel a general readjustment of freight rates. 
Furthermore, it was one of the avowed purposes of the 
Bagdad line to acquire the profitable Indian mails con¬ 
cession from the British Government; this would be 
equivalent to the withdrawal of a subsidy from the steam¬ 
ship lines operating to the East. It was not for their 
own sake, but for the sake of British commerce, however, 


192 


THE BAGDAD RAILWAY 


that these shipping interests objected to the construction 
of the Bagdad line! They warned the British public that 
the proposed railway would adversely affect the traffic 
passing through the Suez Canal; inasmuch as the United 
Kingdom was a stockholder in the Canal, this was the 
concern of every English citizen. They pointed out that 
the kilometric subsidy which had been guaranteed the 
Railway was to be paid from an increase in the customs 
duties; thus, it was charged, British commerce would be 
obliged to contribute indirectly to the dividends of the 
Deutsche Bank. The improvement of communications 
between Middle Europe and the Near East would be 
almost certain to disturb British trade with Turkey; the 
feared and hated “Made in Germany” trade-mark might 
exert its hypnotic influence in a region where British 
commerce heretofore had been preeminent. If, in addition, 
the German owners of the Bagdad Railway should choose 
to grant discriminatory rates to German goods, a severe 
body-blow would be dealt British economic interests in 
the Ottoman Empire. The completion of this Railway 
would bring with it all sorts of German interference in 
the Near East and undermine British commercial and 
maritime interests in the region. 16 

Many of the charges brought against the Bagdad Rail¬ 
way by the British shipping interests could not have been 
substantiated. As early as 1892, Lord Curzon stated em¬ 
phatically that, for most commercial purposes, a trans- 
Mesopotamian railway would be next to valueless. “If 
I were a stockholder in the P. & O. [the Peninsular and 
Oriental, one of the Inchcape lines touching at Indian and 
Persian Gulf ports], I would not,” he said, “except for 
the possible loss of the mails, be in the least alarmed at the 
competition of such a railway.” 17 Informed Germans, 
likewise, did not consider the Bagdad Railway a serious 
competitor to the Suez Canal. One authority, for example, 


GREAT BRITAIN BLOCKS THE WAY 


193 


wrote: “The Bagdad Railway taken as a whole is of im¬ 
portance only for through passenger and postal traffic 
(in which respect, therefore, it is of greatest value to the 
British in their communications with India) and occasion¬ 
ally for fast freight. The great bulk of the freight traffic, 
on the other hand, carrying the import and export trade 
of the East, hardly can fall to the Bagdad Railway, which, 
for a long time at least, must content itself with the local 
traffic of certain sections of the line,” particularly in 
Cilicia, Syria, and northern Mesopotamia. 18 

The assertion that the cost of constructing and operat¬ 
ing the line would be borne by British commerce was 
based upon specious reasoning. Higher customs duties 
would not be paid by the British merchant, but by the 
Turkish consumer. The only harmful effect of the in¬ 
creased duties would be a general increase of prices of 
imported commodities in Turkey, leading, perhaps, to a 
lesser demand for foreign goods. It was probable, on 
the other hand, that this slight disadvantage would be more 
than offset by the wider prosperity which the Railway 
was almost certain to bring the districts traversed. In 
any event, whatever burden might be saddled upon the 
import trade would have to be borne, in proportion to the 
volume of business transacted, by the competitors of 
British merchants as well as by British merchants them¬ 
selves. 

Many British business men were shrewd enough to 
foresee that the Bagdad Railway might prove to be far 
from disadvantageous to their interests. Where was the 
menace to British prosperity in a railway, German or 
otherwise, which promised improved communication with 
the British colonies in the Orient? The facilitation of 
mail service to India; the development of rapid passenger 
service to the East; the reduction of ocean freight rates 
as a result of healthy competition—all of these injured 


194 


THE BAGDAD RAILWAY 


no one except the vested interests which had handicapped 
the expansion of British commerce by inadequate service 
and exorbitant rates. There was no indication that the 
Bagdad Railway Company proposed to discriminate 
against non-German shippers; in any event, such a course 
was specifically prohibited by the concession of 1903, 
which decreed that “all rates, whether they be general, 
special, proportional, or differential, are applicable to all 
travelers and consignors without distinction,” and which 
prohibited the Company “from entering into any special 
contract with the object of granting reductions of the 
charges specified in the tariffs.” 19 As the British Cham¬ 
ber of Commerce at Constantinople appropriately pointed 
out, the most certain means of avoiding discriminatory 
treatment was to permit and encourage the participation 
of British capital in the enterprise and to assure the 
presence of British subjects on the Board of Directors of 
the Company. 20 

From an economic point of view, it would appear that 
the British Empire had a great deal to gain from the con¬ 
struction of the Bagdad Railway. In proportion as 
improved methods of transportation shrink the earth’s 
surface, the contacts between mother country and depen¬ 
dencies will become more numerous. An economic com¬ 
munity of interest is more likely to spring up and thrive 
with the aid of more numerous and more rapid means 
of communication. True, certain interests believed that 
the Bagdad Railway threatened their very existence. But 
would the British people have been willing to sacrifice the 
wider economic interests of the Empire to the vested 
privileges of a handful of English capitalists? They 
would not, of course, if the issue had been put to them 
in such simple terms. The problem was complicated by 
the obvious fact that it was not alone the economic in¬ 
terests of the empire which were at stake. The political 


GREAT BRITAIN BLOCKS THE WAY 


r 95 


import of the Bagdad enterprise overshadowed all eco¬ 
nomic considerations. 

Imperial Defence Becomes the Primary Concern 

British journalists and statesmen, as well as the ordinary 
British patriot, have been accustomed to judge interna¬ 
tional questions from but one point of view—the promo¬ 
tion and protection of the interests of that great and 
benevolent institution, “the noblest fabric yet reared by 
the genius of a conquering nation,’’ the British Empire. 21 
Imperial considerations have been the determining factors 
in the formulation of diplomatic policies and of naval and 
military strategy. The possession of a far-flung empire 
has required further imperial conquests to insure the de¬ 
fence of those already acquired. Strategic necessities 
have constituted a “reason for making an empire large, 
and a large empire larger.” 22 

India, an empire in itself, is the keystone of the British 
imperial system. To defend India it has been considered 
necessary for Great Britain to possess herself of vital 
strategic points along the routes of communication from 
the Atlantic seaboard to the Indian Ocean. The acquisi¬ 
tion of Cape Colony from the Dutch at the conclusion 
of the Napoleonic Wars enabled the British fleet to domi¬ 
nate the old route to India, around the Cape of Good Hope. 
Judiciously placed naval stations at Gibraltar, Malta, and 
Cyprus assured the safety of British trade with the East 
via the Mediterranean. After a futile attempt to prevent 
the construction of the Suez Canal, which temporarily 
placed a new and shorter all-water route to India in the 
hands of the French, Great Britain proceeded to acquire 
the Canal for herself. To assure the protection of the 
Suez Canal, in turn, it was necessary to occupy Egypt and 
the Sudan. Control of Somaliland and Aden, together 


196 


THE BAGDAD RAILWAY 


with friendly relations with Arabia, turned the Red Sea 
into a British lake. Menaced by the Russian advance 
toward India, Great Britain proceeded to dominate the 
entire Middle East: the foreign affairs of Afghanistan 
were placed under British tutelage and protection; Balu¬ 
chistan was compelled to submit to the control of British 
agents; parts of Persia were brought within the sphere 
of British influence. 23 

Great Britain, apparently, was determined to control 
every important route to India. What, then, would be 
her attitude toward a trans-Mesopotamian railway, ter¬ 
minating at the only satisfactory deep-water port on the 
Persian Gulf? Was the possession of such a short-cut 
to India consistent with the exigencies of imperial defence ? 

Without a satisfactory terminus on the Persian Gulf 
the Bagdad Railway would lose its greatest possibilities 
as a great transcontinental line; with such a terminus it 
might become a menace to vital British interests in that 
region. British imperialists had been interested in con¬ 
trol of the Persian Gulf since the seventeenth century, 
when the East India Company established trading posts 
along its shores. The British navy cleared the Gulf of 
pirates; it buoyed and beaconed the waters of the Gulf 
and the Shatt-el-Arab. A favorable treaty with the Emir 
of Muscat, in the latter part of the nineteenth century, 
provided Great Britain with a “sally port” from which to 
organize the defence of the entrance to the Gulf; later, 
Muscat became a protectorate of Great Britain. From 
time to time treaties were negotiated with the Arab chief¬ 
tains of southern Mesopotamia, extending British influ¬ 
ence up the Shatt-el-Arab and the Tigris and Euphrates 
to Bagdad. Under these circumstances, it was apparent 
from the very beginning that, whether or not the Balfour 
Government consented to British participation in the 
Bagdad enterprise, there would be no surrender of the 


GREAT BRITAIN BLOCKS THE WAY 197 


privileged position enjoyed by Great Britain in the Per¬ 
sian Gulf. Foreign merchants might be admitted to a 
share in the Gulf trade, but the existence of a port under 
foreign control hardly could be approved. 24 

Lord Lansdowne, Secretary of State for Foreign 
Affairs, speaking before the House of Lords, on May 5, 
1903, made the position of the Government clear: “I 
do not yield to the noble Lord [Lord Ellenborough] in 
the interest which I take in the Persian Gulf or in the 
feeling that this country stands, with regard to the navi¬ 
gation of the Persian Gulf, in a position different from 
that of any other power. . . . The noble Lord has asked 
me for a statement of our policy with regard to the Persian 
Gulf. I think I can give him one in a few simple words. 
It seems to me that our policy should be directed in the 
first place to protect and promote British trade in those 
waters. In the next place I do not think that he sug¬ 
gests, or that we would suggest, that those efforts should 
be directed towards the exclusion of the legitimate trade 
of other powers. In the third place—I say it without 
hesitation—we should regard the establishment of a naval 
base, or of a fortified port, in the Persian Gulf by any 
other power as a very grave menace to British interests, 
and we should certainly resist it with all the means at our 
disposal. I say that in no minatory spirit, because, as 
far as I am aware, no proposals are on foot for the es¬ 
tablishment of a foreign naval base in the Persian Gulf.” 25 

Lord Lansdowne might have reminded his hearers that, 
although the British Government was disposed to be 
‘friendly toward the Bagdad Railway, measures already 
had been taken which effectively precluded any possibility 
of the construction by the concessionaires, without British 
consent, of terminal and port works at Koweit. In 1899, 
when the first announcements came from Constantinople 
regarding the Bagdad project, Lord Curzon, then Viceroy 


198 


THE BAGDAD RAILWAY 


of India, became alarmed at the construction of a railway 
which would link the head of the Persian Gulf with the 
railways of Central Europe. Lord Curzon was a trained 
imperialist. It was his custom to utter few words; to make 
no proclamations from the housetops; to act promptly 
—and in secret. It was at the instigation of the Indian 
Government that Colonel Meade, British resident in the 
Persian Gulf region, proceeded to Koweit and negotiated 
with the Sheik a clandestine agreement by which the 
latter accepted the “protection” of the British Government 
and agreed to enter into no international agreements with¬ 
out the consent of a British resident adviser. 26 When a 
German technical commission visited Koweit in 1900 to 
negotiate for terminal and port facilities, they found the 
Sheik suspiciously intractable to their wishes. Thereupon 
Abdul Hamid despatched an ex*pedition to Koweit to 
assert his sovereignty over the Sheik’s territory, but the 
presence of a British gunboat rendered both reason and 
force of no avail. 27 

“Protection” of Koweit by Great Britain served notice 
on both Turkey and Germany that the construction of a 
railway, owned and controlled by Germans, to a deep¬ 
water port on the Persian Gulf was deemed contrary to 
the interests of the British Empire. From first to last 
British officials persistently refused to accede to any ar¬ 
rangement which would thus jeopardize imperial com¬ 
munications. Control of the Persian Gulf, an outpost of 
Indian defence, became the keynote of British resistance 
to the Bagdad Railway. 

During the visit of William II to England in 1907, he 
was informed by Lord Haldane, Sir Edward Grey, and 
other responsible British statesmen, that their objections 
to the Bagdad enterprise would be removed if the sections 
of the Railway from Bagdad to Basra and the Persian 
Gulf were under the administration of British capitalists. 28 



GREAT BRITAIN BLOCKS THE WAY 


199 


In March, 1911, shortly after the Kaiser and the Tsar 
had reached an agreement at Potsdam on the Bagdad 
Railway question, Lord Curzon vigorously denounced the 
enterprise as a blow at the heart of Britain’s empire in 
India and called upon the Foreign Office to persist in its 
policy of blocking construction of the final sections of 
the line. 29 This was in accord with a caustic criticism 
of German and Russian activities in the Near East, de¬ 
livered by Mr. Lloyd George to the House of Commons, 
during which the future Premier made it plain that, what¬ 
ever course Russia might pursue, Great Britain would 
not compromise her vital imperial interests in the region 
of the Persian Gulf. 30 The German concessionaires 
learned, to their disappointment and chagrin, that, on this 
point, in any event, the British Government stood firm. 
Even in 1914, when an international agreement was 
reached permitting the construction of the Bagdad Rail- 
way, Great Britain subscribed to the arrangement with 
the express proviso that the terminus of the line should 
be Basra and that the port to be constructed at Basra 
should be jointly owned and controlled by German and 
British capitalists. Construction of the line beyond Basra 
was not to be undertaken without the permission of the 
British Government. 31 

Although fear of foreign interference in the Persian 
Gulf region was the chief political objection raised by 
Great Britain to the construction of the Bagdad Railway, 
it was supplemented by a number of other objections— 
all associated, directly or indirectly, with the defence of 
India. The Bagdad Railway concession of 1903 provided 
for the construction of a branch line from Bagdad to 
Khanikin, on the Turco-Persian border. This proposed 
railway not only would compete with the British caravan 
trade between these cities, amounting to about three- 
quarters of a million pounds sterling annually, but would ? 


200 


THE BAGDAD RAILWAY 


perhaps, lead to the introduction into the Persian imbroglio 
of the influence of another Great Power. Persia lay 
astride one of the natural routes of communication to 
India. The uncertainty of the situation in Persia already 
was such as to cause grave concern in Great Britain, and 
there were few British statesmen who would have wel¬ 
comed German interference in addition to Russian in¬ 
trigue. 32 

British imperialists, too, had excellent reason to fear 
that any increase in the power of the Sultan, such as 
would be certain to follow the construction of adequate 
rail communications in the Ottoman Empire, might be 
but the first step in a renaissance of Mohammedan politi¬ 
cal ambitions, and, perhaps, a Moslem uprising every¬ 
where against Christian overlords. Such a situation— 
had it been sufficiently matured before the outbreak of the 
War of 1914—might have been disastrous to the British 
position in the East: a rejuvenated Turkey, supported by 
a powerful Germany, might have been in a position to 
menace the Suez Canal, “the spinal cord of the Empire/' 
and to lend assistance to seditious uprisings in Egypt, 
India, and the Middle East. Why should Britain not 
have been disturbed at such a prospect, when prominent 
German publicists were boastfully announcing that this 
was one of the principal reasons for official espousal of 
the Bagdadbahn? 83 Why should British statesmen have 
closed their eyes to such a possibility, when the recognized 
parliamentary leader of the Social Democratic Party in 
Germany warned the members of the Reichstag that limits 
must be placed upon the political ramifications of the 
Bagdad enterprise, lest it lead to a disastrous war with 
Great Britain ? 34 

Furthermore, British statesmen were too intimately 
acquainted with the dynamics of capitalistic imperialism 
to accept the assurances of Germans that the Bagdad Rail- 



GREAT BRITAIN BLOCKS THE WAY 


201 


way, and other German enterprises in Turkey, were busi¬ 
ness propositions only. They knew that promises to re¬ 
spect the sovereignty of the Sultan were courteous for¬ 
malities of European diplomatists to cloak scandalous 
irregularities—it was in full recognition of the sacred and 
inviolable integrity of Turkey that Disraeli had taken pos¬ 
session and assumed the “defence” of Cyprus in 1878! 
Furthermore, experienced imperialists knew full well that 
economic penetration was the foundation of political con¬ 
trol. As Mr. Lloyd George informed the House of Com¬ 
mons in 1911, the kilometric guarantee of the Bagdad 
Railway gave German bankers a firm grip on the public 
treasury in Turkey, and such a hold on the imperial Otto¬ 
man purse-strings might lead no one could prophesy 
where. 85 

British experience in Egypt, however, indicated one 
direction in which it might possibly lead. English control 
in Egypt had been acquired by the most modern and 
approved imperial methods. It was no old-fashioned con¬ 
quest; the procedure was much more subtle than that. 
First, Egypt was weighted down by a great burden of 
debt to British capitalists; then British business men and 
investors acquired numerous privileges and intrenched 
themselves in their special position by virtue of the Anglo- 
French control of Egyptian finance; the “advice” of 
British diplomatists came to possess greater force of law 
than the edicts of the Khedive; “disorders” always could 
be counted upon to furnish an excuse for military con¬ 
quest and annexation, should that crude procedure 
eventually become necessary. 30 Might not Wilhelmstrasse 
tear a leaf out of Downing Street’s book of imperial 
experience ? 

There is a seeming inconsistency in this description of 
the British interests involved in the Bagdad Railway ques¬ 
tion. If British shipping might be seriously injured, if 


202 


THE BAGDAD RAILWAY 


the imperial communications were to be endangered, if 
undisputed control of the Persian Gulf was essential to 
the safety of the Empire, if the defence of India was 
to be jeopardized, if a German protectorate might be 
established in Asia Minor—if all these were possibilities, 
how could the Balfour Government afford to temporize 
with the German concessionaires, holding out the hope of 
British assistance? Were Mr. Balfour and Lord Lans- 
downe less fearful for the welfare and safety of the 
Empire than were the newspaper editors? Rather, of 
course, were they convinced that the very best way of 
forestalling any of these developments was to permit 
and encourage British participation in the financing of 
the Bagdad Railway Company. 37 Only thus could British 
trade hope to share in the economic renaissance of the 
Ottoman Empire; only thus could there be British repre¬ 
sentatives on the Board' of Directors to insist that the 
Deutsche Bank confine its efforts to the economic develop¬ 
ment of Turkey, excluding all political arricres pensees. 
And it would not have required an imperialist of the ex¬ 
perience of Mr. Balfour to imagine that dual ownership 
of the Bagdad Railway might have the same ultimate 
outcome as the Dual Control in Egypt. But blind an¬ 
tagonism toward Germany prevented the average English¬ 
man from seeing the obvious advantages of not aban¬ 
doning the Bagdad Railway to the exclusive control of 
German and French capitalists. ^ 

British Resistance is Stiffened by the Entente 

One year after the failure of the Bagdad Railway 
negotiations of 1903, the age-old colonial rivalry of France 
and Great Britain was brought to a temporary close by 
the Entente Cordiale. It is not possible, with the infor¬ 
mation now at our disposal, to estimate with any degree 


GREAT BRITAIN BLOCKS THE WAY 203 

of accuracy the influence which the Bagdad Railway ex¬ 
erted upon British imperialists in the final determination 
to reach an agreement with France. One may agree with 
an eminent French authority, however, that “neither in 
England nor in France is the principle of the understand¬ 
ing to be sought. Rather was it the fear of Germany 
which determined England—not only her King and Gov¬ 
ernment, but the whole of her people—to draw nearer 
France.” 38 British fear and dislike of Germany were 
founded upon the phenomenal growth of German industry 
and overseas commerce, the rapid expansion of the Ger¬ 
man mercantile marine, the construction of the German 
navy, and the insistence of German diplomatists that 
Germany be not ignored in colonial matters. The Bagdad 
Railway did nothing to quiet those fears. It served, 
rather, to render precarious Britain’s position in the East. 

In March, 1903, when the definitive Bagdad Railway 
concession was granted, British imperial affairs were in 
a far from satisfactory state. The termination of the 
Boer War had ended the fear that the British Empire 
might lose its hold on South Africa, but the sharp criti¬ 
cism of British conduct toward the Boers—criticism which 
came not only from abroad, but from malcontents at 
home—had dealt a severe blow to British prestige. The 
relentless advance of Russia in China, Persia, and Afghan¬ 
istan gave cause for anxiety as to the safety of Britain’s 
possessions in the Middle and Far East. And although 
France had withdrawn gracefully from the Fashoda affair, 
it was by no means certain that Egypt had seen the last 
of French interference. Added to all of these difficulties 
was the proposed German-owned railway from Constanti¬ 
nople to the Persian Gulf, flanking the Suez Canal and 
reaching out to the back door of India. 

Under such circumstances it was small wonder that 
Great Britain took stock of her foreign policies. The 


204 


THE BAGDAD RAILWAY 


Anglo-Japanese Alliance of 1902 already had ended the 
British policy of aloofness, and there appeared to be no 
sound reason against the negotiation of other treaties 
which similarly would strengthen the British position in 
the East. The Bagdad Railway negotiations collapsed, 
but the agreement with France—which seemed far more 
difficult of achievement—was consummated without fur¬ 
ther delay. Three years later, in 1907, Great Britain 
came to an agreement with another of her rivals in the 
East—Russia. The Tsar, chastened by military defeat 
abroad and by revolution at home, recognized a British 
sphere of interest in Persia, relinquished all claims in 
Afghanistan, and acknowledged the suzerainty of China 
over Tibet. 39 The understanding with France had assured 
the safety of the Suez Canal from an attack from the 
Sudan; the agreement with Russia removed the menace 
of an attack upon India from the north and northwest. 
Germany became Great Britain’s only formidable rival 
in the Near East. 

Thus the Germans found themselves facing a powerful 
diplomatic obstacle to the construction of the Bagdad 
Railway. Here was another instance, in their minds, of 
the “encirclement” of Germany by a hostile coalition— 
an “encirclement” not only on the Continent, but in a 
German sphere of imperial interest as well. A con¬ 
spicuous German Oriental scholar said that the attitude 
of the other European powers toward the Bagdad Railway 
was the best proof of their enmity toward Germany. 
“Every single kilometre had to be fought for against the 
unyielding opposition of Great Britain, Russia, and 
France, who desired to frustrate any increase in the 
power of Turkey. Great Britain led and organized this 
opposition because she feared that India and Egypt were 
threatened by the Bagdad Railway.” If one wishes to 
understand the diplomatic history of the War, “he needs 


GREAT BRITAIN BLOCKS THE WAY 205 


only to study the struggle for the Bagdad Railway—he 
will find a laboratory full of rich materials.” 40 Here was 
the tragedy of the Bagdad Railway—it was one of a num¬ 
ber of imperial enterprises which together constituted a 
principal cause of the greatest war of modern times! 

There were some ardent British imperialists who were 
out of sympathy with the popular opposition to the Bag¬ 
dad Railway and with the policy of the Entente in ob¬ 
structing the building of the line. Few Englishmen 
were more thoroughly acquainted with the Near East 
than Sir William Willcocks. 41 Basing his opinions upon 
an intimate, scientific study of conditions in Mesopotamia, 
he advocated full British cooperation with the Deutsche 
Bank in the construction of the Bagdad Railway, which 
he considered was the best means of transportation for 
Irak. He criticized the British Government for its short¬ 
sighted policy in the protection of the Lynch Brothers and 
their antiquated river service; “rivers,” he said, “are for 
irrigation, railways for communications.” Furthermore, 
“You cannot leave the waters of the rivers in their chan¬ 
nels and irrigate the country with them. For navigation 
you may substitute railway transport; for the purpose of 
irrigation nothing can take the place of water.” 42 He 
believed that adequate irrigation of the Mesopotamian 
Valley would result in such a wave of prosperity for the 
country that it would induce immigration, particularly 
from Egypt and British-India. It was not inconceivable, 
under such conditions, that Britain would fall heir to 
ancient Mesopotamia when the Ottoman Empire should 
disintegrate. 43 Sir William Willcocks was neither pacifist 
nor visionary; he, himself, was an empire-builder. 

Another British imperialist who believed that Great 
Britain was pursuing entirely the wrong course in ob¬ 
structing German economic penetration in lurkey was 
Sir Harry Johnston, novelist, explorer, lecturer, former 


206 


THE BAGDAD RAILWAY 


member of the consular service. He believed in “The 
White Man’s Burden,” in the inevitable overrunning of 
the habitable globe by the Caucasian race. But he believed 
that the task of spreading white civilization to the four 
corners of the earth was such an herculean task, that 
“what we white peoples ought to strive for, with speech 
and pen, is unity of purpose; an alliance throughout all 
the world in this final struggle for mastery over Nature. 
We ought to adjust our ambitions and eliminate causes 
of conflict.” His program for the settlement of the Near 
Eastern question was: “the promotion of peace and good¬ 
will among white nations, to start with; and when the 
ambitions and the allotment of spheres of influence have 
been nicely adjusted, then to see that the educational task 
of the Caucasian is carried out in a right, a Christian, a 
practical, and sympathetic fashion towards the other races 
and sub-species of humanity.” Sir Harry believed that 
Great Britain was the last country in the world which 
ought to oppose the legitimate colonial aspirations of any 
other nation. There was every reason for the recognition 
of the economic and moral bases of German expansion, 
and any dog-in-the-manger attitude on the part of British 
statesmen, he was sure, would defeat the highest interests 
of the Empire. 44 

Applying his principles to the problem of Teutonic 
aggrandizement in the Ottoman Empire, Sir Harry 
Johnston advocated that the western European nations 
should acknowledge the Austrian Drang nach Osten as 
a legitimate and essential part of the German plans for a 
Central European Federation and for the economic de¬ 
velopment of Turkey. “The Turkish Sultanate would 
possibly not come to an end, but would henceforth, within 
certain limits, be directed and dominated by German 
councils. Germany in fact would become the power with 
the principal ‘say’ as to the good government and economic 


GREAT BRITAIN BLOCKS THE WAY 


207 


development of Asia Minor. Syria might be constituted 
as a separate state under French protection, and Judea 
might be offered to the Jews under an international 
guarantee. Sinai and Egypt would pass under avowed 
British protection, and Arabia (except the southern por¬ 
tion, which already lies within the British sphere of in¬ 
fluence) be regarded as a federation of independent Arab 
States. For the rest, Turkey-in-Asia—less Armenia, 
which might be handed over to Russia—would, in fact, 
become to Germany what Egypt is to England—a kingdom 
to be educated, regenerated, and perhaps transfused and 
transformed by the renewed percolation of the Aryan 
Caucasian. Here would be a splendid outlet for the ener¬ 
gies of both Germany and Austria, sufficient to keep them 
contented, prosperous, busy, and happy, for at least a 
century ahead.” Sir Harry believed that obstructionist 
tactics on the part of Great Britain would promote Prus- 
sianism within Germany, whereas, on the other hand, a 
frank recognition of Germany’s claims in the Near East 
would provide Central Europe with a safety valve which 
would “relieve pressure on France, Belgium, and Russia, 
paving the way for an understanding on Continental 
questions. Let us—if we wish to be cynical—welcome 
German expansion with Kruger’s metaphor of the tortoise 
putting out his head. Germany and Austria are dangerous 
to the peace of the world only so long as they are penned 
up in their present limits.” 45 j 

One obvious disadvantage of the solution suggested by 
Sir Harry Johnston was its total indifference to the wishes 
of the Ottoman Turks. Apparently it was out of place 
to consider the welfare of Turkey in a discussion of the 
Bagdad Railway question! Certainly there were very 
few European statesmen who cared the least about the 
opinions of Turks in the disposition of Turkish property. 
Among the few was Viscount Morley, one of the old 


208 


THE BAGDAD RAILWAY 


Gladstonian Liberals. Answering Lord Curzon, in the 
House of Lords, March 22, 1911, Lord Morley, a member 
of the Asquith cabinet, asserted the right of the Turks to 
determine their own destinies: “A great deal of nonsense,” 
he said, “is talked about the possible danger to British 
interests which may be involved some day or other when 
this railway is completed, and there have been whimsical 
apprehensions expressed. One is that it will constitute 
a standing menace to Egypt . . . because it would estab¬ 
lish [by junction with the Syrian and Hedjaz railways] 
uninterrupted communication between the Bosporus and 
Western Arabia. That would hardly he an argument for 
Turkey to abandon railway construction on her oum soil, 
whereas it overlooks the fact that the Sinai Peninsula in¬ 
tervenes. You cannot get over this plain cardinal fact, 
that this railway is made on Turkish territory by virtue 
of an instrument granted by the Turkish Government. 
. . . I see articles in newspapers every day in which it is 
assumed that we have the right there to do what we please. 
That is not so. It is not our soil, it is Turkish soil, and 
the Germans alone are there because the Turkish Govern¬ 
ment has given them the right to be there.” 46 


BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 Sir William Andrew, Memoir on the Euphrates Valley Route 
(London, 1857), passim; also The Euphrates Valley Route to 
India (London, 1882) ; F. R. Chesney, Narrative of the Euphrates 
Expedition (London, 1868) ; The Proposed Imperial Ottoman 
Railway, a prospectus issued by the promoters (London, 1857) 
F. von Koeppen, Moltke in Kleinasien (Hanover, 1883). 

Cf. article Suez Canal in Encyclopedia Britannica, Volume 
26, p. 23. How similar were these objections to those subse¬ 
quently advanced in opposition to the Bagdad Railway! Cf., 
e. g., a statement by Lord Curzon, Parliamentary Debates, House 
of Lords, fifth series, Volume 7 (1911), pp. 583 et seq. 

3 Andrew, Memoir on the Euphrates Valley Route, p. 225. 


GREAT BRITAIN BLOCKS THE WAY 


209 


4 Parliamentary Debates, House of Lords, fourth series, Volume 
121 (1903), p. 1345; “The Bagdad Railway Negotiations,” in 
The Quarterly Review, Volume 228 (1917), pp. 489-490; Baron 
Kuhn von Kuhnenfeld, The Strategical Importance of the Eu¬ 
phrates Valley Railway (English translation by Sir C. W. 
Wilson, London, 1873) ; V. L. Cameron, Our Future Highway 
to India, 2 volumes (London, 1880) ; A. Berard, La route de 
I’lnde par la vallee du Tigre et de VEuphrate (Lyons, 1887) ; 
F. Jones, The Direct Highway to the East considered as the 
Perfection of Great Britain s duties toward British India (Lon¬ 
don, 1873). 

6 Supra, pp. 66-67. 

8 Parliamentary Debates, House of Commons, Volume 120 
(1903), pp. 1247-1248, 1358, 1361, 1364-1367, 1371-1374. 

7 Lord Mount Stephen had been president of the Canadian 
Pacific Railway and of the Bank of Montreal. Lord Revelstoke 
was senior partner in the firm of Baring Brothers & Company 
and a director of the Bank of England. 

8 The participation of the three Great Powers was to be on the 
basis of 25-25-25%, 15% was to be reserved for minor groups, 
and 10% for the Anatolian Railway Company. The provisions 
of Article 12 of the concession of 1903 were to be amended to 
establish a board of directors of 30, upon which each of the 
principal participants should be represented by 8 members. The 
remaining 6 members of the board were to be designated by the 
Ottoman Government and the Anatolian Railway Company. The 
directors were to be appointed by the original subscribers so that 
sale or transfer of shares could not alter the proportionate rep¬ 
resentation thus agreed upon. 

9 For the facts in this and the succeeding paragraph the author 
is indebted to Dr. Arthur von Gwinner, managing director of the 
Deutsche Bank; and to Sir Henry Babington Smith, erstwhile 
chairman of the Ottoman Public Debt Administration, a partner 
of Sir Ernest Cassel, president of the National Bank of Turkey, 
and a director of the Bank of England. Dr. von Gwinner 
placed at the disposal of the author many of the records of the 
Deutsche Bank and of the Bagdad Railway Company, and Sir 
Henry Babington Smith graciously volunteered to answer many 
puzzling questions. 

10 Parliamentary Debates, House of Commons, Volume 121 
(1903), pp. 271-272. 

u The British banking houses interested in the Bagdad enter¬ 
prise were Baring Brothers, Sir Ernest Cassel, and Morgan- 
Grenfell Company. Cf. The Westminster Gazette, April 24, 
1903; Stenographische Berichte, XII Legislaturperiode, 2 Session, 
Volume 260 (1910), p. 2i8id. The bankers, of course, were not 


210 


THE BAGDAD RAILWAY 


bound by the decision of the Cabinet to withdraw from the 
negotiations; they still would have been at liberty to invest in 
Bagdad Railway securities, as did the French bankers. How¬ 
ever, it has been the practice of British financiers to accept the 
“advice” of the Foreign Office in the case of loans which may 
lead to international complications. An analogous case in 
American experience was the decision of prominent New York 
financial institutions to withdraw from the Chinese consortium 
in 1913 because of the avowed opposition of President Wilson 
to the terms of the loan contract. 

13 The Nineteenth Century, Volume 65 (1909), pp. 1090-1091. 

13 Supra, pp. 30, 59-6o. 

14 Parliamentary Debates, House of Commons, Volume 120, 
pp. 1360-1361; Volume 126, p. 108. The opinions of Mr. Gibson 
Bowles were not cordially received by The Scotsman, which said, 
April 9, 1903, “Mr. Gibson Bowles carried the House in imagina¬ 
tion to the banks of the Euphrates and Tigris. Germany is there 
seeking by means of a railway to supersede our trade, and to 
serve herself heir to the wealth and empire of ancient Babylon 
and Assyria. The member for King’s Lynn was, as usual, not 
very well posted up on his facts. On this occasion he was so 
entirely wrong-headed that no one on the opposition bench would 
agree with him. . . . The outstanding moral of the debate was, 
indeed, that the honorable member for King’s Lynn was much in 
want of a holiday.” 

“Fraser, op. cit., pp. 42-43. The senior member of the firm 
of Lynch Brothers was H. F. B. Lynch (1862-1913), who was 
widely known as an authority on the Near East and who, as a 
Liberal member of Parliament, 1906-1910, was able to call official 
attention to the necessity for safeguarding British interests in 
Persia and Mesopotamia. That he succeeded in convincing the 
Government of the importance of his navigation concession is 
evidenced by the vigorous protests filed by the British Govern¬ 
ment with the Young Turks in 1909, when the latter attempted 
to operate competing vessels on the Tigris and the Shatt-el-Arab. 
On this point see Stcnographischc Bcrichte, XII Legislatur- 
periode, 2 Session, Volume 260 (1910), pp. 2i74d et seq. Again 
in 1913-1914, the British Government refused to consider any 
settlement of the Bagdad Railway question which did not ade¬ 
quately protect the interests of the Lynch Brothers. Infra, pp. 
258-265. Mr. Lynch, however, was not an irreconcilable opponent 
of the Deutsche Bank. He took the point of view that the Ger¬ 
mans had rendered Turkey a great service by the construction 
of the Anatolian Railways because of the total lack of natural 
means of communication in the Anatolian plateau. He urged 
that they were making a great mistake, however, to extend the 


GREAT BRITAIN BLOCKS THE WAY 211 

Anatolian system into Mesopotamia, where the Tigris and Eu¬ 
phrates provided natural and logical avenues of trade for the 
Valley of the Two Rivers. In Mesopotamia, he maintained, 
what was needed was a development of the river traffic, not the 
construction of railways. Cf. H. F. B. Lynch, “The’ Bagdad 
Railway,” Fortnightly Review, March 1, 1911, pp. 384-386. 

10 It will be recalled that the Hamburg-American Line estab¬ 
lished a Persian Gulf service in 1906. Supra, pp. 108-109. Re¬ 
garding the activities of British shipping and commercial inter¬ 
ests in opposing the Bagdad Railway see Diplomatic and Consular 
Reports, No. 2950 (1902), pp. 25 et seq., No. 3140 (1904), pp. 24 
et seq.; The Times, April 24, 1903. 

17 G. N. Curzon, Persia and the Persian Question (2 volumes, 
London, 1892), Volume I, p. 635; a similar view was set forth 
by Sir Thomas Sutherland, of the P. & O., in a letter to The 
Times, April 27, 1903. 

18 E. Banse, Auf den Spuren der Bagdadhahn (Weimar, 1913), 
Chapter XI, Die Wahrheit iiber die Bagdadbahn, a critical anal¬ 
ysis of the value of the Railway in Eastern trade, pp. 145-146. 
Cf., also, Dr. R. Hennig, “Der verkehrsgeographische Wert des 
Suez- und des Bagdad-Weges,” in Georgraphische Zeitschrift, 
Volume 22 (1916), pp. 649-656. 

** Specifications, Articles 24-25. It might be added that the 
Company loyally observed this restriction; C. W. Whittall & Co., 
largest British merchants in Turkey so testified. Anatolia, p. 
103; von Gwinner, loc. cit., p. 1090. Sir Edward Grey said no 
complaints of discrimination against British goods had come to 
the attention of the Foreign Office. Parliamentary Debates, 
House of Commons. 5 Series, Volume 53 (1913), pp. 392-393. 

Diplomatic and Consular Reports, No. 3140, p. 30. 

21 Consider the dedication of Lord Curzon’s Persia and the 
Persian Question: “To the officials, military and civil, in India, 
whose hands uphold the noblest fabric yet reared by the genius 
of a conquering nation, I dedicate this work, the unworthy tribute 
of the pen to a cause, which by justice or the sword, it is their 
high mission to defend, but whose ultimate safeguard is the 
spirit of the British people.” 

“Woolf, op. cit., p. 24. 

23 Regarding the Anglo-Russian rivalry in the Middle East, cf. 
Rose, op. cit., Part II, Chapters I-IV; Curzon, Persia and the 
Persian Question, Volume II, Chapter XXX. 

24 See a statement by Lord Lansdowne, in the House of Lords, 
Parliamentary Debates, fourth series, Volume 121 (1903), p. 
1347, and a statement by Lord Curzon, ibid., fifth series, Volume 
7 (1911), pp. 583-587; also Curzon, Persia and the Persian Ques¬ 
tion, Volume II, Chapter XXVII. The strategic importance of 


212 


THE BAGDAD RAILWAY 


the Persian Gulf to the British Empire was realized by foreign 
observers, as well as by English statesmen. Writing in 1902, 
Admiral A. T. Mahan, an American, said, “The control of the 
Persian Gulf by a foreign state of considerable naval poten¬ 
tiality, a ‘fleet in being’ there based upon a strong military port, 
would reproduce the relations of Cadiz, Gibraltar, and Malta to 
the Mediterranean. It would flank all the routes to the farther 
East, to India, and to Australia, the last two actually internal 
to the Empire, regarded as a political system; and although at 
present Great Britain unquestionably could check such a fleet, 
so placed, by a division of her own, it might well require a 
detachment large enough to affect seriously the general strength 
of her naval position.” A. T. Mahan, Retrospect and Prospect 
(New York, 1902), pp. 224-225. Lord Curzon is said to have 
remarked that he “would not hesitate to indict as a traitor to 
his country any British minister who would consent to a foreign 
Power establishing a station on the Persian Gulf.” A. J. Dunn, 
British Interests in the Persian Gulf (London, 1907), p. 7. See 
also The Persian Gulf (No. 76 of the Foreign Office Hand¬ 
books) ; Handbook of Arabia, Volume I (Admiralty Intelligence 
Division, London, 1916) ; Lovat Fraser, India wider Curzon and 
After (London, 1911). 

25 Parliamentary Debates, House of Lords, fourth series, 
Volume 121 (1903), pp. 1347-1348. Two observations should be 
made regarding this quotation. First, it is included in every 
book I have consulted on the Bagdad Railway, written since 
1903, but in every instance the last sentence has been omitted— 
a sentence which considerably alters the spirit of the statement. 
Second, the German press, at the time, considered that the warn¬ 
ing was directed, not at the Bagdad Railway, but at the rapid 
and alarming advance of Russia in Persia. Cf. an analysis of 
foreign press comments in an article by J. I. de La Tour, “Le 
chemin de fer de Bagdad et l’opinion anglaise,” in Questions 
diplomatiqucs et colonialcs, Volume 15 (1903), pp. 609-614—an 
excellent digest. 

26 Cf. a statement by Lord Cranborne, Under-Secretary of State 
for Foreign Affairs, in Parliamentary Debates, House of Com¬ 
mons, fourth series, Volume 101 (1902), p. 129. Although he 
was less than forty years of age at the time of his appointment 
as Governor-General of India (1898), the Right Plonorable 
George Nathaniel Curzon, Baron Curzon of Kedleston, even at 
that early age, had had wide experience and training of the type 
so common among the masters of British imperial destiny. Fie 
was educated at Eton and Oxford, and he traveled widely in the 
Near East. He served as a member of Parliament, from 1886 
until 1898. He was Under-Secretary of State for India, 1891- 


GREAT BRITAIN BLOCKS THE WAY 


213 


1892; Under-Secretary of State for Foreign Affairs, 1895-1898: 
Privy Councillor, 1895. 

21 Supra, p. 34 : The Annual Register, 1901, pp. 304-305; K. 
Helfferich, Die Vorgeschichte des Weltkrieges, p. 129. 

28 Viscount Haldane, Before the War (London, 1920), pp. 48- 
51; Viscount Morley, Recollections (New York, 1917), p. 238. 

39 Infra, pp. 239-244; Parliamentary Debates, House of Lords, 
fifth series, Volume 7 (1911), pp. 583-587, 589. It is interesting 
to contrast this opinion of a German trans-Mesopotamian railway 
with that held by the same man when it was proposed that 
British capitalists should construct such a line. Writing in 
1892, Lord Curzon had this to say regarding the project: “Its 
superficial attractions judiciously dressed up in a garb of 
patriotism, were such as to allure many minds; and I confess 
to having felt, without ever having succumbed to, the fascina¬ 
tion. Closer study, however, and a visit to Syria and Mesopo¬ 
tamia have convinced me both that the project is unsound, and 
that it does not, for the present, at any rate, lie within the 
domain of practical politics.” Lord Curzon believed that a 
Mesopotamian railway would be practically valueless for military 
purposes: “The temperature of these sandy wastes is excessively 
torrid and trying during the summer months and I decline to 
believe that during half the year any general in the world would 
consent to pack his soldiers into third class carriages for con¬ 
veyance across those terrible thousand miles, at least if he 
anticipated using them in any other capacity than as hospital 
inmates at the end.” Persia and the Persian Question, Volume 

I, PP- 633-635. 

30 Parliamentary Debates, House of Commons, fifth series, 
Volume 21 (1911), pp. 241-242. 

81 Infra, pp. 258-265. 

82 For the views of a typical British imperialist on the Persian 
situation, cf., Curzon, Persia and the Persian Question, Volume 

II, Chapter XXX; a later account is that of the American, W. 
Morgan Shuster, The Strangling of Persia (New York, 1912) ; 
cf., also, H. F. B. Lynch, “Railways in the Middle East,” in 
Proceedings of the Central Asian Society (London), March 1, 
1911. 

33 See P. Rohrbach, Die Bagdadbahn, p. 18; Reventlow, op. cit., 
PP- 338-343. That Rohrbach’s frank avowal of the menace of 
the Bagdad Railway to India and Egypt was not without influ¬ 
ence in Great Britain is evidenced by the fact that long quota¬ 
tions from Die Bagdadbahn were read into the records of the 
House of Commons by the Earl of Ronaldshay, on March 23, 
1911. Parliamentary Debates, fifth series, Volume 23, p. 628. 

84 Herr Scheidemann, in an eloquent speech to the Reichstag, 


214 


THE BAGDAD RAILWAY 


March 30, 1911, pleaded with the German Government to be 
sympathetic with the position in which Great Britain found her¬ 
self. No nation with the imperial responsibilities of Great 
Britain could afford to neglect to take precautionary steps against 
the possibility of the Bagdad Railway being used as a weapon 
of offense against Egypt, the Suez Canal, and India. “Com¬ 
plications upon complications,” he said, “are certain to arise as 
a result of the construction of the Bagdad Railway. But we 
expect of our Government, at the very least, that in the course 
of protecting the legitimate German economic interests which 
are involved in the Bagdad Railway, it will leave no stone un¬ 
turned to prevent the development of Anglo-German hostility 
over the matter. We want to do everything possible to effect 
a thorough understanding with England. Only by such a policy 
can we hope to quiet the fears of British imperialists that the 
Railway is a menace to the Empire.” Stenographische Berichte, 
XII Legislaturperiode, 2 Session, Volume 266 (1911), pp. 5980c- 
5984b. 

33 Parliamentary Debates, House of Commons, fifth series, 
Volume 21 (1911), pp. 241-242. 

33 Cf. H. N. Brailsford, The War of Steel and Gold, Chapter 
III, “The Egyptian Model ” 

37 Supra, pp. 181-182. 

88 Andre Tardieu, France and the Alliances (New York, 1908), 
p. 46. For M. Tardieu’s analysis of the causes of the growing 
Anglo-German hostility, cf. pp. 48-57. It was in the latter part 
of April, 1903, that the Bagdad Railway negotiations fell through. 
In May, Edward VII paid an official visit to Paris; in October, 
an arbitration agreement was signed by France and Great Britain. 
The following spring the treaties constituting the Entente Cor- 
diale were executed. Sir Thomas Barclay, Thirty Years’ Remi¬ 
niscences (London, 1906), pp. 175 et seq. For the text of these 
agreements cf. Parliamentary Papers, Volume 103 (1905), No. 
Cd. 2384. 

39 For the text of the Anglo-Russian Entente, cf. British and 
Foreign State Papers, Volume 100, pp. 555 et seq. Regarding 
the nature of the Anglo-Russian rivalry in the Middle East and 
the effect of the Bagdad Railway in hastening a settlement of 
that rivalry, cf. Edouard Driault, La question d’Orient depuis 
ses origines jusqu’a la paix de Sevres (Paris, 1921), Chapter 
VIII, and pp. 273 et seq .; also Tardieu, op. cit., pp. 239-252, and 
Curzon, op. cit., Volume II, Chapter XXX. 

"Ernst Jackh, Die deutsch-tiirkische Waffenbriiderschaft 
(Stuttgart, 1915), PP- 17-18. 

" Sir William Willcocks (1852- ) is one of the foremost 


GREAT BRITAIN BLOCKS THE WAY 


215 


authorities on Egypt, India, and Mesopotamia. As a young man 
he was employed in India by the Department of Public Works 
and for a period of eleven years, 1872-1883, was engaged in the 
construction of the famous irrigation works there. From 1883- 
1893, he was employed in a similar capacity by the Egyptian 
Public Works and was largely responsible for the development 
of irrigation in the Nile Valley. In 1898, he planned and pro¬ 
jected the Assuan Dam, which turned out to be the greatest 
irrigation work in the East. In 1909, Sir William Willcocks 
became consulting engineer to the Ottoman Ministry of Public 
Works, and was responsible for the construction, 1911-1913, by 
the British firm of Sir John Jackson, Ltd., of the famous Hindie 
barrage, the first step in the irrigation of the Valley of the Two 
Rivers. 

43 Mesopotamia, p. 54, and The Geographical Journal, August, 
1912. 

43 The Recreation of Chaldea (Cairo, 1902). This suggestion 
led to the absurd charge by Dr. Rohrbach that Sir William Will- 
cocks was actively promoting the establishment of a British 
colonial empire in southern Mesopotamia. German World Poli¬ 
cies, pp. 160-161. Cf., also, Diplomatic and Consular Reports, 
No. 3140 (1903), p. 27. 

** H. H. Johnston, Common Sense in Foreign Policy (London, 
1913), PP- v-vii. A similar opinion was expressed by Colonel 
A. C. Yate, at a meeting of the Central Asian Society, May 22, 
1911. In answer to an alarmist paper on the Bagdad Railway 
which had been read to the society by Andre Cheradame, Colonel 
Yate made a spirited speech in which he warned his countrymen 
that M. Cheradame proposed that they should follow the same 
mistaken policy which had guided Lord Palmerston in resistance 
to the construction of the Suez Canal. “We cannot pick up 
every day,” he said, “a Lord Beaconsfield, who will repair the 
errors of his blundering predecessors . . . Because the German 
Emperor and his instruments have adopted and put into practice 
the plans which Great Britain rejected [for a trans-Mesopotamian 
railway], we are now, forsooth, to pursue a policy which savours 
partly of ‘sour grapes’ and partly of ‘dog-in-the-manger,’ and 
which in either aspect will do nothing to strengthen British hands 
and promote British interests.” Proceedings of the Central Asian 
Society (London), May 22, 1911, p. 19. 

48 Johnston, op. cit., pp. 50-51, 61. Sir Harry Johnston made 
an extended lecture tour through Germany during 1912 for the 
purpose of promoting Anglo-German friendship. For details of 
this trip see Schmitt, op. cit., pp. 355-356. It is interesting to 
note how nearly Sir Harry’s proposals corresponded with the 


2 l6 


THE BAGDAD RAILWAY 


terms of the treaties of 1913-1914. Infra, Chapter X. For a 
similar point of view, cf. Angus Hamilton, Problems of the 
Middle East (London, 1909), pp. 178-180. 

4t Parliamentary Debates, House of Lords, fifth series, Volume 
7 (1911), pp. 601-602. The italics are mine. 


CHAPTER IX 

THE YOUNG TURKS ARE WON OVER 

A Golden Opportunity Presents Itself to the 

Entente Powers 

The Young Turk revolutions of 1908 and 1909, which 
ended the reign of Abdul Hamid in the Ottoman Empire, 
offered France and Great Britain an unprecedented op¬ 
portunity to assume moral and political leadership in the 
Near East. Many members of the Committee of Union 
and Progress, the revolutionary party, had been educated 
in western European universities—chiefly in Paris—and 
had come to be staunch admirers of French and English 
institutions. “Liberty, Equality, Fraternity,” the slogan 
of Republican France, became the watch-cry of the new 
era in Turkey. Parliamentary government and minis¬ 
terial responsibility under a constitutional monarch, the 
political contribution of Britain to Western civilization, 
became the aim of the reformers at Constantinople. The 
Ottoman Empire was to be modernized politically, indus¬ 
trially, and socially according to the best of western 
European traditions. 1 

Into this scheme of things German influence fitted not 
at all. From the Young Turk point of view the Kaiser 
was an autocrat who not only had blocked democratic re¬ 
form in Germany, but also had propped up the tottering 
regime of Abdul Hamid and thus had aided suppression of 
liberalism in the Ottoman Empire. As for Baron Mar- 
schall von Bieberstein, he had hobnobbed with the ex- 

Sultan and was considered as much a representative of 

217 


2 l8 


THE BAGDAD RAILWAY 


the old order of things as Abdul Hamid himself. As Dr. 
Rohrbach described the situation, “the Young Turks, 
liberals of every shade, believed that Germany had been 
a staunch supporter of Abdul Hamid’s tyrannical govern¬ 
ment and that the German influence constituted a de¬ 
cided danger for the era of liberalism. That thought was 
zealously supported by the English and French press in 
Constantinople. The Young Turkish liberalism showed 
in the beginning a decided leaning toward a certain form 
of Anglomania. England, the home of liberty, of parlia¬ 
ments, of popular government—such were the catch 
phrases promulgated in the daily papers.” 2 

German prestige suffered still further because of the 
unseemly conduct of Germany’s allies toward the Young 
Turk Government. The revolution of 1908 was less than 
three months old when Austria-Hungary annexed Bosnia- 
Herzegovina. Almost simultaneously, Ferdinand of 
Bulgaria—presumably at the instigation and with the con¬ 
nivance of Austria—declared the independence of Bul¬ 
garia from the Sultan and assumed for himself the title 
of tsar. To cap the climax, Italy was intriguing in Tripoli 
and Cyrenaica with a view to the eventual seizure of those 
provinces. Baron Marschall found it impossible to ex¬ 
plain away these hostile moves of the allies of Germany, 
and he protested vehemently against the failure of the 
Foreign Office at Berlin to restrain Austria-Hungary and 
Italy. He warned Prince von Billow that vigorous action 
must be taken if Germany’s influence in the Near East 
were not to be totally destroyed. 3 

The decline of German prestige at Constantinople could 
not have been without effect upon the Bagdad Railway 
and the other activities of the Deutsche Bank. The Bagdad 
enterprise, in fact, was looked upon as a concrete manifes¬ 
tation of German hegemony at the Sublime Porte and as 
the crowning achievement of the friendship of those two 


THE YOUNG TURKS ARE WON OVER 


219 


autocrats of the autocrats, Abdul Hamid and William II. 
As such, it was certain to draw the fire of the reformers. 
The concession of 1903 had never been published in Tur¬ 
key. Only fifty copies had been printed, and these had 
been distributed only among high officials of the Palace, 
the Sublime Porte, and the Ministries of War, Marine, 
and Public Works. It was generally supposed by the 
Union and Progress party, therefore, that the summaries 
published in the European press were limited to what the 
Sultan chose to make public. “The secrecy which thus 
enveloped the Bagdad Railway concession gave rise to 
the conviction that the contract contained, apart from det¬ 
rimental financial and economic clauses, provisions which 
endangered the political independence of the State.” 4 
And Young Turks were determined to tolerate no such 
additional limitations on the sovereignty of their country. 

The opening, in the autumn of 1908, of the first parlia¬ 
ment under the constitutional regime in Turkey gave the 
opponents of the Bagdad Railway their chance. A bitter 
attack on the project—in which hardly a single provision 
of the contract of 1903 escaped scathing criticism—was 
delivered by Ismail Hakki Bey, representative from Bag¬ 
dad, editor of foreign affairs for a well-known reform 
journal, and a prominent member of the Union and Prog¬ 
ress party. Hakki Bey denounced the Railway as a 
political and economic monstrosity which could have been 
possible only under an autocratic and corrupt government; 
in any event, he believed, it could have no place in the 
New Turkey. He proposed complete repudiation of the 
existing contracts with the Deutsche Bank. In this pro¬ 
posal he received considerable support from other mem¬ 
bers of the parliament. 

An equally ringing, but more reasoned, speech was de¬ 
livered by the talented Djavid Bey, subsequently to be¬ 
come Young Turk Minister of Finance. He agreed that 


220 


THE BAGDAD RAILWAY 


the concession of 1903 infringed upon the economic and 
administrative independence of the Ottoman Empire; he 
condemned the scheme of kilometric guarantees as an 
unwarranted and indefensible drain upon the Treasury;' 
he denounced the preponderance of strategic over business 
considerations in the construction of the line; he made it 
plain that he had no wish to see the extension of German 
influence in Turkey. He believed that the Bagdad con¬ 
cession should be revised in the interest of Ottoman 
finance and Ottoman sovereignty. But there must be no 
repudiation. “We must accept the Bagdad Railway 
contract, because there should exist a continuity and 
a solidarity between generations and governments. If 
a revolutionary government remains true to the obli¬ 
gations of its predecessor—even if those obligations be 
contracted by a government of the worst and most 
despotic kind—it will arouse among foreigners ad¬ 
miration of the moral sense of the nation and will 
accordingly increase public confidence. Just now, more 
than at any other time in our history, we Turks 
need the confidence of the world.” Everything should 
be done to effect a revision of the Bagdad Railway con¬ 
cession, however, and a firm resolve should be taken never 
again to commit the nation to such an engagement. 

The anti-German and pro-Entente proclivities of the 
Young Turks were expressed in tangible ways. In 1909, 
for example, the Ottoman Navy was placed under the 
virtual command of a British admiral, and British officers 
continued to exercise comprehensive powers of adminis¬ 
tration over the ships and yards almost to the declaration 
of war in 1914. In 1909, also, Sir Ernest Cassel accepted 
an invitation to establish the National Bank of Turkey, 
for the purpose of promoting more generous investment 
of British capital in the Ottoman Empire. During the 
same year Sir William Willcocks was appointed consult- 


THE YOUNG TURKS ARE WON OVER 


221 


ing engineer to the Minister of Public Works, and his 
plans for the irrigation of Mesopotamia were put into 
immediate operation. Sir Richard Crawford, a British 
financier, was appointed adviser to the Minister of 
Finance; a British barrister was made inspector-general 
of the Ministry of Justice; a member of the British con¬ 
sular service became inspector-general of the Home Office. 
Later, serious consideration was given to a proposal to 
invite Lord Milner to head a commission to suggest re¬ 
forms in the political and economic administration of 
Anatolia. A French officer was made inspector-general 
of the gendarmerie. In June, 1910, a French company 
was awarded a valuable concession for the construction 
of a railway from Soma to Panderma, and the following 
year the lucrative contract for the telephone service in 
Constantinople was granted to an Anglo-French syndicate. 5 

The Young Turk Government likewise was desirous 
of doing everything possible to remove French and British 
objections to the construction of railways in the Ottoman 
Empire. With this end in view they prevailed upon Dr. 
von Gwinner to reopen negotiations with Sir Ernest Cas- 
sel regarding British participation in the Bagdad Railway, 
and they secured the consent of the Deutsche Bank to a 
rearrangement of the terms of the concession of 1903. 
The latter was to be undertaken in accordance with 
British wishes and with due regard to the financial situa¬ 
tion of Turkey. This was followed up, on November 8, 
1909, by a formal request of the Ottoman ambassador at 
London for a statement of the terms upon which the 
British Government would withdraw its diplomatic ob¬ 
jections to the Bagdad enterprise. Simultaneously nego¬ 
tiations were initiated for “compensations” to French 
interests, represented by the Imperial Ottoman Bank. 

Until the end of the year 1909, then, the political situ¬ 
ation in the Ottoman Empire under the revolutionary gov- 


222 


THE BAGDAD RAILWAY 


ernment had been almost altogether to the advantage of 
the Entente Powers. During 1910, however, German 
prestige began to revive in the Near East, and by the 
spring of 1911 German influence in Turkey had won 
back its former preeminent position. 

The Germans Achieve a Diplomatic Triumph 

The Young Turk program, in its political aspects, was 
not only liberal, but nationalist. In the fresh enthusiasm 
of the early months of the revolution, emphasis was laid 
upon modernizing the political institutions of the em¬ 
pire—parliamentary government and ministerial responsi¬ 
bility and equality before the law were the concern of 
the reformers. As time went on, however, liberalism was 
eclipsed by nationalism and modernizing by Ottomanizing. 
By the autumn of 1909 Turkish nationalist activities were 
in full swing. Revolts in Macedonia and Armenia were 
suppressed with an iron hand; there were massacres in 
Adana and elsewhere in Anatolia and Cilicia; restrictions 
were imposed upon personal liberties and upon freedom 
of the press; martial law was declared. Pan-Turkism 
and Pan-Islamism were revived as political movements. 6 

The development of an aggressive Turkish nationalism 
was not viewed with equanimity by the Entente nations. 
The newspapers of France and England roundly de¬ 
nounced the Adana massacres and came to adopt a hostile 
attitude toward the Young Turk Revolution, which only 
a short time previously they had extravagantly praised. 
Great Britain looked with apprehension upon Ottoman 
support of the nationalist movements in Egypt and India, 
and France was disturbed at the prospect of a Pan-Islamic 
revival in Tunis, Algeria, and Morocco. Russia de¬ 
manded “reform” in Macedonia and Armenia and en¬ 
couraged anti-Turk propaganda in the Balkans. English 


THE YOUNG TURKS ARE WON OVER 223 


interference in Cretan affairs and British support of the 
insolent Sheik of Koweit still further complicated the 
situation. 7 

For Germany, on the other hand, Turkish nationalism 
held no menace. So far from desiring a weak Turkey— 
as did most of the other European Powers—her policy 
in the Near East was based upon the strengthening of 
Turkey. If Turkey was to be strong, she must suppress 
dissentient nationalist and religious minorities; therefore 
Germany raised no voice of protest against the Armenian 
and Macedonian atrocities. If Turkey sought to recover 
territories which formerly had acknowledged the suzer¬ 
ainty of the Sultan, Germany had nothing to fear; the 
Kaiser ruled over no such territories. If Turkey chose 
to arouse the Moslem world by a Pan-Islamic revival, that 
was no concern of Germany; the German Empire had a 
comparatively insignificant number of Mohammedan sub¬ 
jects. If the Turkish program discomfited the Entente 
Powers, that was to Germany’s advantage in the great 
game of world politics; therefore Germany could afford 
to support the Young Turk Government. As in the days 
cf Abdul Hamid, Germany appeared to be the only friend 
of the Ottomans. 8 

The improvement in the German political position at 
Constantinople was reflected in a changing Turkish atti¬ 
tude toward the Bagdad Railway. Among revolutionary 
leaders there was a growing realization of the great eco¬ 
nomic and political importance of railways and, par¬ 
ticularly, of the Bagdad system. It became apparent upon 
examination, also, that others than Germans had obtained 
monopolistic concessions in the Ottoman Empire—in this 
respect the Lynch Brothers came in for a good deal of at¬ 
tention. The Ottoman General Staff—which had recalled 
General von der Goltz as chief military adviser—insisted 
that the early construction of a trans-Mesopotamian rail- 


224 


THE BAGDAD RAILWAY 


way at whatever cost, was essential to the defence of the 
empire. In spite of serious financial difficulties resulting 
from strikes, increased cost of materials, and general 
economic paralysis which followed upon the heels of the 
revolutions of 1908 and 1909, the Anatolian and Bagdad 
Railway Companies advanced large sums to the Minister 
of Finance toward the ordinary expenses of running the 
Government. In addition, the concessionaires evinced a 
desire to meet all Turkish financial and diplomatic objec¬ 
tions to the provisions of the concession of 1903. 9 

It was the financial needs of the Young Turk adminis¬ 
tration which enabled German diplomacy and the Deutsche 
Bank to reestablish themselves thoroughly in the good 
graces of the Ottoman Government. But here again the 
Germans were given their chance only after England and 
France had turned the Turks away empty handed. 

During the summer of 1910, Djavid Bey, as Ottoman 
Minister of Finance, went to Paris to raise a loan of 
$30,000,000, secured by the customs receipts of the Otto¬ 
man Empire. The negotiations with the Parisian bankers 
were complicated by a bitter anti-Turk campaign on the 
part of the press and by the frequent interference of the 
French Government. Nevertheless, Djavid Bey suc¬ 
ceeded in signing a satisfactory contract with a French 
syndicate, and his task appeared to be accomplished. At 
this juncture, however, M. Pichon, French Minister of 
Foreign Affairs, informed the bankers that official sanc¬ 
tion for the proposed loan would be withheld unless the 
Ottoman Government would consent to have its budget 
administered by a resident French adviser. The Young 
Turk ministry, determined to tolerate no further foreign 
intervention in the administrative affairs of the empire, 
flatly refused to consider any such proposal, and Djavid 
Bey was instructed to break off all negotiations. “As a 
true and loyal friend of France,” wrote Djavid, “I re- 


THE YOUNG TURKS ARE WON OVER 225 

gretted this incident as one likely to strain the future rela¬ 
tions between the two countries.” 

From Paris Djavid Bey went to London. Sir Ernest 
Cassel appeared to be willing to negotiate a loan to Turkey 
of the desired amount, but, upon representations from M. 
Cambon, the French ambassador at London, Sir Edward 
Grey persuaded Cassel not to put in a bid for the bonds. 
This decision was reached largely, as Djavid Bey was in¬ 
formed by the British Foreign Office, because the Bag¬ 
dad Railway was considered to be “an enterprise which 
under the existing concession has not been conceived in 
the best interests of the Ottoman Empire, while it offers, 
as at present controlled, an undoubted menace to the 
legitimate position of British trade in Mesopotamia.” To 
the Turkish Government this statement was a piece of 
gratuitous impertinence, for, as Djavid Bey replied, “It 
was a prerogative only of the Ottoman Government to 
determine whether the conditions of construction and 
management of the Bagdad Railway were beneficial or 
detrimental to Turkey. England had no more right to ob¬ 
ject to the Bagdad Railway than Germany had to object 
to the British and French lines in operation in Turkey.” 

The collapse of the financial negotiations in Paris and 
London offered the Deutsche Bank an opportunity which 
its directors were too shrewd to overlook. Dr. Helfferich 
was despatched to Constantinople and within a few weeks 
had secured the contract for the entire issue of $30,000,- 
000 of the Ottoman Four Per Cent Loan of 1910, upon 
terms almost identical with those agreed upon with the 
French syndicate before M. Pichon’s interference. “On 
this occasion,” writes Djavid Bey, “the Germans handled 
the business with great intelligence and tact. They brought 
up no points which were not related directly or indirectly 
to the loan, and they made no conditions which would 
have been inconsistent with the dignity of Turkey. This 


226 


THE BAGDAD RAILWAY 


attitude of Germany met with great approval on the part 
of the Turkish Government, which was then in a very 
difficult position. The result was the greatest diplomatic 
victory in the history of the Ottoman Empire between 
the revolution of 1908 and the outbreak of the Great 
War.” 10 

The purchase of the loan of 1910 by the Deutsche Bank, 
however, did not solve the financial problems of the Young 
Turk Government. It was essential that measures be 
taken to increase the revenues of the Ottoman Empire. 
Accordingly, negotiations had been conducted during 1910, 
and were continued until midsummer of 1911, to secure 
the consent of the Powers to an increase of 4% in the 
customs duties. It was apparent from the outset that 
the British Government would block any project for an 
increase in Turkish taxes, unless it were granted im¬ 
portant compensations of a political and economic char¬ 
acter and unless it could determine, in large measure, 
the purposes for which the additional revenues would be 
expended. In this respect, also, it appeared that Entente 
policy was standing in the way of the success of the Revo¬ 
lution in Turkey! 

British objections to the proposed increase in the Otto¬ 
man customs duties were founded in large part upon 
British opposition to the Bagdad Railway and, more par¬ 
ticularly, to the sections of the Railway between Bagdad 
and the Persian Gulf. In the spring of 1910, the British 
Government proposed that a concession for a railway from 
Bagdad to Basra via Kut-el-Amara should be awarded to 
British financiers, in order that British economic interests 
in Mesopotamia might be adequately safeguarded. In 
May of that year Sir Edward Grey wrote the British am¬ 
bassador at Constantinople, “Please explain quite clearly 
to the Turkish Government that the British Government 
will not agree to any addition to the taxes until this claim 


THE YOUNG TURKS ARE WON OVER 227 

for a concession is taken into favorable consideration, 
and also that Great Britain’s attitude towards Turkey will 
depend largely upon how she meets this demand of yours.’' 
Upon the refusal of the Ottoman Government to accede 
to this demand, Sir Edward Grey wrote to Sir Henry 
Babington Smith, English representative on the Ottoman 
Public Debt Administration, that England must be 
awarded at least a 55% participation in the Bagdad-Basra 
section of the Bagdad Railway, as well as concessions for 
the construction and control of port works at Koweit. In 
addition, Turkey should be made to understand that Great 
Britain could approve no agreement without the sanction 
of the French and Russian Governments. 

When Djavid Bey was in London in July, 1910, he sub¬ 
mitted two counterproposals to Sir Edward Grey: first, 
that the portion of the Bagdad Railway from Bagdad to 
Basra should be internationalized upon terms agreeable 
to Sir Ernest Cassel and Dr. Arthur von Gwinner; or, 
second, that the Ottoman Government itself should under¬ 
take the construction of the line beyond Bagdad. The 
British Foreign Office indicated that it might consent to 
an increase in the Ottoman customs duties until April, 
1914, upon some such terms, provided the consent of the 
other Powers were forthcoming, and provided Turkey 
would surrender her right of veto over the borrowing 
powers of Egypt. Because of the collapse of the loan 
negotiations, however, nothing further came of these 
proposals. 

On March 7, 1911, the Ottoman ministers at London 
and Paris presented to the British and French Govern¬ 
ments respectively a proposition that the Bagdad-Basra 
section of the Bagdad Railway should be constructed by 
an Ottoman company, to the capital of which the Turkish 
Government should subscribe 40%, and German, French, 
and British capitalists 20% each. The Sublime Porte 


228 


THE BAGDAD RAILWAY 


expressed a willingness, furthermore, to confer with rep¬ 
resentatives of France and Great Britain for the purpose 
of satisfying the legitimate political demands of those 
two nations in Syria and Mesopotamia. The following 
day, nevertheless, Sir Edward Grey informed the House 
of Commons that His Majesty’s Government was not pre¬ 
pared to consent to an increase in the Turkish customs 
duties, because it was not clear that the Ottoman Govern¬ 
ment was ready to guarantee adequate protection to 
British commercial interests in Mesopotamia and the re¬ 
gion of the Persian Gulf. 11 

This decision was received in Constantinople with undis¬ 
guised animosity. Young Turks were as little disposed to 
tolerate British, as they were French, supervision of Otto¬ 
man finances and economic policies. The press roundly 
denounced the British and said that once again Turkey 
had been shown the wisdom of friendship for Germany. 12 

Entente actions were contrasted with the more concilia¬ 
tory policy of the Germans. As early as November, 1910, 

Baron Marschall von Bieberstein had notified the Sublime 

<« 

Porte that Germany would place no obstacles in the way 
of an increase in the Ottoman customs duties and that, 
furthermore, his Government was prepared to urge that 
the Anatolian and Bagdad Railway Companies forego any 
additional assignment of Turkish revenues. During the 
first week of March, 1911, Dr. von Gwinner and Dr. 
Helflferich informed the Ottoman Government that the 
Bagdad Railway Company was willing to abandon its 
right to construct the sections of the line from Bagdad 
to Basra and the Persian Gulf, including the concessions 
for port and terminal facilities at Basra. The Turkish 
Government was to be given a free hand as to the dis¬ 
position of the portion of the railway beyond Bagdad, 
with the single reservation that the Deutsche Bank should 
be awarded a share in the enterprise equal to that granted 


THE YOUNG TURKS ARE WON OVER 229 


any non-Ottoman group of financiers. The German pro¬ 
posals were accepted and incorporated in a formal con¬ 
vention of March 21, 1911, by which the Bagdad Railway 
Company abandoned its claims to further commitments 
from the Ottoman Treasury and agreed, at the pleasure 
of the Turkish Government, to surrender its concession 
for the Bagdad-Basra-Persian Gulf sections to an Otto¬ 
man company internationally owned and controlled. 13 

The outcome of the negotiations for an increase in the 
customs duties was a keen disappointment to the Young 
Turks. Desirous as they were of carrying the Bagdad 
enterprise to a successful conclusion, they could not help 
resenting its political implications. “We tried,” writes 
Djavid Bey, “to better our relations with the English; they 
talked to us of the Bagdad Railway! We tried to intro¬ 
duce financial and economic reforms in Turkey; we found 
before us the Bagdad Railway! Every time an occasion 
arose, the French stirred up the Bagdad Railway question. 
Even the Russians, notwithstanding the Potsdam Agree¬ 
ment, 14 constantly waved in their hands the Bagdad 
weapon.” This resentment was fortified by the knowledge 
that those who opposed the Bagdad Railway were those 
who believed that the Sick Man would die and were in¬ 
terested in the division of his inheritance. From these 
Powers Turkey could accept no tutelage! 

The German Railways Justify Their Existence 

From the Turkish point of view, the best test of the 
wisdom of supporting the German railway concessions in 
Turkey was an examination of the results achieved in im¬ 
proving political and economic conditions in the Ottoman 
Empire. By 1914 the Anatolian Railways and part of the 
Bagdad Railway had been in existence a sufficient length 
of time to appraise their worth to Asia Minor, and the 


230 


THE BAGDAD RAILWAY 


appraisal thus arrived at would be a fair prognostication 
of the value of the entire system when it should be opened 
to operation. 

Dr. von Gwinner, in justification of the Bagdad Rail¬ 
way enterprise, summarized what he believed to be the 
chief services of the Anatolian Railways to Turkey. 
“More than twenty years ago,” he wrote in 1909, “my 
predecessor, the late George von Siemens, conceived the 
idea of restoring to civilization the great wastes of Asia 
Minor and Mesopotamia, once and for long the center of 
the history of humanity. The only means of achieving 
that end was by building railways; this was undertaken, 
slowly but persistently, and with marvelous results. Con¬ 
stantinople and the Turkish army at that time were eating 
bread made from Russian flour; they are now eating grain 
of their own country’s growth. Security in Asia Minor 
at that time was hardly greater than it is to-day in Kurdis¬ 
tan. When the Deutsche Bank's engineers reached a sta¬ 
tion a little beyond Ismid (Nikomedia) on the Sea of 
Marmora, the neighborhood was infested by Tscherkess 
robbers; the chief of those robbers is now a stationmaster 
of the Anatolian Railway Company, drawing about £100 
per annum, a party as respectable as the late Mr. Micaw- 
ber after his conversion to thrift. The railways brought 
ease to the peasantry, who are obtaining for their harvest 
twice to four times the price formerly paid, and the rail¬ 
ways have brought revenue to the Treasury. The Ana¬ 
tolian Railway’s lines are in as good condition as any 
line in the United Kingdom, and their transportation 
charge is less than half the rates of any railway in 
England.” 15 

Although this was the statement of an avowed protago¬ 
nist of the Anatolian Railway, the testimony of other ob¬ 
servers must lead to the conclusion that it was not an 
overestimate of the value of the Anatolian system. As 


THE YOUNG TURKS ARE WON OVER 


231 


early as 1903, for example, the British Consul General at 
Constantinople wrote: “There is no doubt that the agri¬ 
cultural production of the districts traversed by the An¬ 
gora Railway has increased largely. Before the Angora 
Railway was opened there was no export of grain from 
that district; the annual export of wheat and barley is now 
from £1,500,000 to £2,000,000. The Railway has attracted 
a large number of immigrants from Bulgaria and Russia, 
who have settled in the most fertile parts. They form a 
hardworking and intelligent population, accustomed to 
more civilized methods of cultivation than the Anatolian 
peasantry. Population, improved communications and se¬ 
curity are ‘the essentials required for the development of 
Asia Minor. The Railway attracts the one and creates the 
others. All agree that the country along the Railway is 
much safer than elsewhere. It would be surprising, there¬ 
fore, if the production of the country did not increase.” 16 
The improvement in economic conditions in Anatolia 
became more marked as time went on. The Anatolian 
Railway Company established a special agricultural de¬ 
partment for the education of the peasantry in more im¬ 
proved methods of farming; nurseries and experimental 
stations were maintained; -demonstrations were given of 
the best systems of irrigation and drainage; attention was 
paid to the development of markets for surplus products 
of various kinds. American agricultural machinery was 
introduced and promised to become widely adopted. 
As a result of these improvements, the agricultural out¬ 
put of the country increased by leaps and bounds, and 
the cultivated areas in some districts were more than 
doubled. Famine, formerly a common occurrence, became 
a thing of the past, because irrigation eliminated the dan¬ 
ger of recurrent .droughts and floods. Increased produc¬ 
tion assured a plentiful food supply, and improved 
transportation enabled the surplus of one district to be 


232 


THE BAGDAD RAILWAY 


transferred, in case of need, to another. All in all, the 
peasantry were developing qualities of industry, thrift, and 
adaptability which seemed to forecast great things for 
the future of Asia Minor. 17 

Furthermore, the German railways in Turkey, the 
failure of which had been freely prophesied, proved to be 
successful business enterprises. The directors took all 
possible steps to build up the earning power of the lines, 
rather than depend upon the minimum return guaranteed 
by the Ottoman Government. The railways were ef¬ 
ficiently and intelligently administered—the operating ex¬ 
penses of the Anatolian and Bagdad lines never exceeded 
47% of the gross receipts, although the operating ex¬ 
penses of the chief European railways, under much more 
favorable conditions, varied from 54% to 62% of gross 
receipts during the same period. Occasional dividends of 
5% or 6% were paid by the Anatolian and Bagdad Rail¬ 
way Companies between 1906 and 1914, but only when 
the disbursements were warranted by earnings. In 1911, 
a notable advance was made by the introduction of oil¬ 
burning locomotives on the Bagdad lines; henceforth the 
German railways in Turkey were operated with fuel 
purchased from the Standard Oil Company of New 
Jersey! 18 

This scrupulously careful management eventually 
brought its reward. In 1911, the earnings of the Angora 
line exceeded the kilometric guarantee and, in accordance 
with the terms of the concession, the Ottoman Govern¬ 
ment received a share of the receipts. In 1912, the re¬ 
turns of the Eski Shehr-Konia line also exceeded the sum 
guaranteed by the Government, the Ottoman Treasury 
receiving a share of the earnings of the Anatolian system 
to an amount of more than $200,000. After 1913, no 
further payments to the Anatolian Railway Company were 
required under the kilometric guarantees. 19 


THE YOUNG TURKS ARE WON OVER 233 

The results on the completed sections of the Bagdad 
Railway were equally promising, as will be indicated by 
the following table: 20 

Kilometres Gross Total Gov- 


in Pas- Freight Receipts per ernment 
Year Operation sengers Tons Kilometre Subsidy 

( Francs ) ( Francs ) 

1906. 200 29,629 13,693 1,368.83 624,028.21 

J 9°7. 200 37,145 23,643 1,75444 546,129.77 

1908. 200 52,759 15,941 1,839-86 529,443.12 

J 909. 200 57,026 15,364 1,936 72 509,56545 

1910 . 200 71,665 27,756 2,571.43 381,135 58 

1911 . 238 95,884 38,046 3,379-34 238,166.59 

1912 . 609 288,833 57,670 5,3i5.67 278,785.25 

1913 .609 407,474 78,645 3,786.53 216,295.17 

1914 . 887 597,675 116,194 8,177.97 2,939,983.00 


Figures in italics indicate payments to the Turkish Government 
of its share of the receipts in excess of the guarantee of 4,500 
francs per kilometre. 

The improvement in the economic conditions of Ana¬ 
tolia, and the success of the German railways as business 
enterprises, were sources of great satisfaction and profit 
to the Imperial Ottoman Government. Not only was the 
Treasury receiving revenue from the railway lines which 
had formerly been a drain upon the financial resources of 
the empire, but the receipts from taxes in the regions 
traversed by the railways were constantly increasing. As 
early as 1893 the Ottoman Ministry of Public Works an¬ 
nounced that the increase in tithes and the increased value 
of farm lands in Asia Minor had more than justified ex¬ 
penditures by the Sultan’s Government in subsidies to 
the Anatolian Railway. 21 For those portions of Anatolia 
which were served by the Railway, the amount of the 
tithes had almost doubled in twenty years: in 1889, the 
year after the award of the Anatolian concession, $639,760 
was collected; in 1898, $948,070; in 1908, $1,240,450. In 











234 


THE BAGDAD RAILWAY 


certain districts the amount of the tithes collected in 1908 
was five or six times as great as the yield before the con¬ 
struction of the Railway. 22 

The economic prospects of Turkey never were brighter 
than they were just before the outbreak of the Great War. 
The new regime had removed many of the vexatious re¬ 
strictions on individual initiative which had characterized 
the rule of Abdul Hamid. The country’s losses in men 
in the Italian and Balkan wars had been made up by an 
immigration of Moslem refugees from the ceded terri¬ 
tories. Numerous concessions had been granted for the 
exploitation of mines, the construction of public utilities, 
and the improvement of the means of communication. 
“There was a feeling abroad in the land that an era of 
exceptional commercial and industrial activity was about 
to dawn upon Turkey.” The Ottoman Empire was in 
a fair way to become modernized according to Western 
standards. 23 

Thus the Anatolian and Bagdad Railways achieved all 
that was claimed for them by their sponsors. They in¬ 
creased political security in Asia Minor; they brought 
about an economic renaissance in the homeland of the 
Turks; they justified the investment of public funds which 
was necessary to bring the system to completion. Beyond 
the Amanus Mountains lay the plains of Syria and the 
great unexploited wealth of Mesopotamia. A development 
of Mesopotamia, even as modest as that achieved in Ana¬ 
tolia, would pay the cost of the Bagdad Railway many 
times over. Were the Ottoman statesmen who supported 
this great project to be condemned for so great a service 
to their country? Or would they have been short-sighted 
had they failed to realize the great potentialities of rail¬ 
way construction in Asiatic Turkey? That the Bagdad 
Railway contributed to the causes of Turkish participation 
in the Great War—and to the disintegration of the Otto- 


THE YOUNG TURKS ARE WON OVER 


235 


man Empire—was not so much the fault of the Turks 
themselves as it was the blight laid upon Turkey, a “back¬ 
ward nation,” by European imperialism. 


The Young Turks Have Some Mental Reservations 

Although the revolutionary party in Turkey had come 
to look with favor upon German influence in the Near 
East, and particularly to support the Bagdad Railway, 
there is little reason for accepting the too hastily drawn 
conclusion that the Young Turks had sold their country 
to the Kaiser or that they were under a definite obligation 
to subscribe to German diplomatic policies. They were too 
strongly nationalistic for that. They believed that the 
Ottoman Empire must eventually rid itself of foreign ad¬ 
ministrative assistance, foreign capital invested under far- 
reaching economic concessions, and foreign interference 
in Ottoman political affairs. But for a period of transition 
—during which Turkey could learn the secrets of Western 
progress and adapt them to her own purposes—it was the 
obvious duty of a forward-looking government to utilize 
European capital and European technical assistance for 
the welfare of the empire. Patriotism and modernism 
went hand in hand in the Young Turk program. 24 

The Young Turks were not unaware of the menace of 
the Bagdad Railway to their own best hopes. As Djavid 
Bey appropriately says: “The great drawback of this en¬ 
terprise was its political character, which clung to it and 
became a source of endless toil and anxiety for the coun¬ 
try. In a word, it poisoned the political life of Turkey. 
If the Bagdad concession had not been granted, the revo¬ 
lutionary government could have solved much more easily 
pending political and economic problems. But one must 
admire the courage of Abdul Plamid in granting the con¬ 
cession, no matter what the cost, because the construction 


236 


THE BAGDAD RAILWAY 


of the Bagdad line was essential for the defence and the 
economic progress of the empire. Unfortunately for 
Turkey, she has always had to suffer from such politico- 
economic concessions. 

“The Bagdad Railway did not escape the malady of 
politics. When one entered the meeting room of the 
company, one breathed the atmosphere of the ministerial 
chamber in Wilhelmstrasse and felt in both Gwinner and 
Helfferich the presence of undersecretaries for foreign 
affairs. This state of affairs, instead of simplifying the 
negotiations and relations between Germany and Turkey, 
served only to envenom them.” 


BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 For accounts of the Young Turk Revolutions see Rene Pinon, 
VEurope et la jeune Turquie (Paris, 1911) ; V. Berard, La revo¬ 
lution turque (Paris, 1909) ; C. R. Buxton, Turkey in Revolution 
(London, 1909) ; Ernst Jackh, Der aufsteigende Halbmond (Ber¬ 
lin, 1911); A. H. Lybyer, “The Turkish Parliament,” in Pro¬ 
ceedings of the American Political Science Association, Volume 
VII (1910), pp. 66 et seq.; S. Panaretoff, Near Eastern Affairs 
and Conditions (New York, 1922), Chapter V; A. Kutschbach, 
Die tiirkische Revolution (Halle, 1909) ; Baron C. von der Goltz, 
Der jungen Tiirkei Niederlage und die Moglichkeit Hirer Wieder- 
erhebung (Berlin, 1913). 

3 Paul Rohrbach, Germany’s Isolation, p. 50. 

8 Karl Helfferich, Die deutsche Tiirkenpolitik, p. 21. 

4 This quotation, together with many other facts in this chap¬ 
ter, is from a lengthy memorandum of Djavid Bey on the Bagdad 
Railway, prepared especially for the use of the author in the 
writing of this book. It is dated January 3, 1923, and was for¬ 
warded from the Lausanne Conference for Peace in the Near 
East. Unless otherwise specified, quotations from Djavid Bey 
here given are from this memorandum. There probably is no 
person who knows more of the Ottoman point of view on the 
Bagdad Railway than Djavid, who as Young Turk Minister of 
Finance and, later, as Turkish delegate to the Ottoman Public 
Debt Administration has had perhaps an unprecedented oppor¬ 
tunity to observe the financial and economic ramifications of 
European imperialism in the Near East. 


THE YOUNG TURKS ARE WON OVER 237 


8 Diplomatic and Consular Reports, No. 4835 (1911), p. 16; 
Mesopotamia, p. 41; The Annual Register, 1911, pp. 364-365; 
Armenia and Kurdistan, p. 62; Turkey in Europe, pp. 72-73; 
Anatolia, pp. 51-52, 81; infra, pp. 244-246. 

9 Pan-Turkism, or Pan-Turanianism, started as a cultural 
movement among Ottoman intellectuals. It assumed political 
aspects as a result of three important circumstances: 1. Aggres¬ 
sions against Turkey by foreign powers; 2. The ardent nation¬ 
alism of the Balkan states bordering on Turkey; 3. The ex¬ 
istence within Turkey of vigorous dissident nationalities, such 
as the Armenians and the Arabs. Pan-Turanianism and Pan- 
Islamism, although separate movements, had much in common. 
In 1911, at any rate, the Young Turks adopted Pan-Islamism 
as part of their program. Pinon, op. cit., pp. 134 et seq.; Moham¬ 
medan History, pp. 89-96; Sir Thomas Barclay, The Turco- 
Italian War and Its Problems (London, 1912), pp. 100 et seq. 

T For an excellent statement of the reaction of Turkish nation¬ 
alism upon European politics see The Quarterly Review, Volume 
228 (1917), pp. 511 et seq. 

8 Regarding the coincidence of German and Turkish interests 
during the reign of Abdul Hamid cf. supra, pp. 64-65, 125-130. 

9 Report of the Anatolian Railway Company, 1908 and 1909, pp. 
8-9; The Annual Register, 1909, pp. 337 et seq.; Stenographische 
Berichte, XII Legislaturperiode, 1 Session, Volume 260 (1910), 
pp. 2i74d et seq. 

10 From Djavid Bey’s memorandum. For scattered details of 
these negotiations see The Annual Register, 1910, pp. 336-340; 
Report of the Deutsche Bank, 1910, pp. 13 et seq.', K. Helfferich, 
Die deutsche Tiirkenpolitik, pp. 23 et seq.; Ostrorog, op. cit., 
pp. 60-61. 

“ Parliamentary Debates, House of Commons, fifth series, 
Volume 22 (1911), pp. 1284-1285. For further details of the 
negotiations of 1909-1911 cf. B. von Siebert, Diplomatische 
Aktenstiicke sur Geschichte der Ententepolitik der Vorkriegs- 
jahre (Berlin and Leipzig, 1921), Chapters VIII and IX. Here¬ 
inafter cited as de Siebert documents. 

13 Cf. foreign correspondence of The Times, March 21, 1911. 

” Troisieme convention additionelle a la contention du 5 Mars, 
1903, relative au chemin de fer de Bagdad (Constantinople, 
1911) ; supra, pp. 111-113. 

14 Cf. infra. Chapter X. 

15 The Nineteenth Century, Volume 65 (1909), pp. 1083-1084. 

19 Diplomatic and Consular Reports, No. 3140 (1903)* P- 29. 

11 Societe du chemin de fer d’Anatolie—Jahresbericht des 
Agrikultur-Dienstes (Berlin, 1899 et seq.), passim. 


238 


THE BAGDAD RAILWAY 


u Archiv fiir Eisenbahnwesen, Volume 31 (Berlin, 1908), pp. 
207-211, 1485-1491; Commerce Reports, No. i8d (Washington, 
1915), P- 95 Diplomatic and Consular Reports, No. 4835 (1911), 
p. 17; Report of the Anatolian Railway Company, 1910-1913, 
passim. 

19 Report of the Anatolian Railway, 1911-1914, passim. 

20 Compiled from the Report of the Bagdad Railway Company, 
1903-1914. Figures for the years 1904 and 1905 are incomplete 
and have therefore been omitted. It should be kept in mind in 
reading this table that the years 1912-1914 were abnormal, espe¬ 
cially as regards passenger traffic, because of the two Balkan 
Wars and the Great War. 

11 The Levant Herald (Constantinople), October 25, 1893. 

” Caillard, loc. cit., p. 439. 

” Commerce Reports, No. i8d (1915), pp. 1-2. 

**Cf. Questions diplomatiques et coloniales. Volume 26 (1908), 

PP. 475-477. 


CHAPTER X 
BARGAINS ARE STRUCK 
The Kaiser and the Tsar Agree at Potsdam 

During the early days of November, 1910, William II 
entertained at the Potsdam palace his fellow sovereign 
Nicholas II, Tsar of all the Russias. He extended his 
royal hospitality, also, to the recently chosen foreign minis¬ 
ters of Germany and Russia respectively—Herr von 
Kiderlen-Waechter, next to the ambassador at Constanti¬ 
nople the Kaiser’s most competent expert on the tortuous 
affairs of the Near East; and M. Sazonov, subsequently to 
guide Russian foreign policy during the critical days of 
July, 1914. It was apparent even to the untutored that 
there was some political significance to the conference be¬ 
tween the German Emperor and his distinguished guests, 
and the press was rife with speculation as to what the out¬ 
come would be. The answer was forthcoming on Novem¬ 
ber 4, when it was announced that the Kaiser and the 
Tsar, with the advice and assistance of their foreign 
ministers, had reached an agreement on the Bagdad Rail¬ 
way question. 

A short time later the terms of this Potsdam Agree¬ 
ment were made public. As outlined by the German 
Chancellor, with some subsequent modifications, they were 
as follows: 1. Germany recognized the Russian sphere of 
interest in northern Persia, as defined by the Anglo- 
Russian agreement of 1907, and undertook not to seek or 
support concessions for railways, roads, telegraphs, or 
other means of communication in the region; in other 

239 


240 


THE BAGDAD RAILWAY 


words, there was to be no change in the status quo. 2. 
Russia recognized the rights of the Deutsche Bank in the 
Bagdad Railway and agreed to withdraw all diplomatic 
opposition to the construction of the line and to the par¬ 
ticipation of foreign capital therein. 3. Russia agreed to 
obtain from Persia, as soon as possible, a concession for 
the construction of a railway from Teheran, the capital 
city, to Khanikin, an important commercial city on the 
Turco-Persian frontier. This new railway was to be 
linked with a branch of the Bagdad system to be con¬ 
structed in accordance with the terms of the concession 
of 1903 from Sadijeh, on the Tigris, to Khanikin. Both 
lines were to be planned for through international traffic. 
If, for any reason, the Russian Government should fail 
to build the proposed railway from Teheran to Khanikin, 
it was understood that German promoters might then apply 
for the concession. 4. The policy of the economic open 
door was to be observed by both nations. Russia agreed 
not to discriminate against German trade in Persia, and 
the two nations pledged reciprocal equality of treatment 
on the new railway lines from Sadijeh to Teheran. 1 

Russia had a great deal to gain and little to lose by 
the Potsdam Agreement. Whether Russia liked it or not, 
the Bagdad Railway had become a going concern, and 
there was every indication that another decade would see 
its completion. When finished, the Bagdad system, to¬ 
gether with projected Persian lines, would provide Rus¬ 
sian trade with direct communications with the Indies 
(via Bagdad and the Persian Gulf) and with the Mediter¬ 
ranean (via Mosul, Aleppo, and the Syrian coast). By 
the entente of 1907 with Great Britain the Tsar had re¬ 
nounced his imperial interests in southern Persia; there¬ 
fore he had little to gain by a dog-in-the-manger attitude 
toward the development of Mesopotamia by the Germans. 
Under these circumstances continued resistance to the 


BARGAINS ARE STRUCK 


241 


Bagdad Railway appeared to be short-sighted and futile. 
Cheerful acquiescence, on the other hand, might bring 
tangible diplomatic compensations. In addition, it has 
been suggested, Russian reactionaries were delighted at the 
prospect of a rapprochement with Prussia, in which they 
saw the last strong support of a dying autocracy. 2 

From the German point of view the agreement with 
Russia was a diplomatic triumph. All that Germany con¬ 
ceded was recognition of Russia’s special position in 
Persia, which affected no important German interests and 
exerted no appreciable influence on the balance of power 
in the Near East. In return, German trade was to be ad¬ 
mitted to the markets of Persia, heretofore an exclusively 
British and Russian preserve; the sphere of the Bagdad 
Railway was to be considerably enlarged; Russian political 
obstruction of the Bagdad enterprise was to cease. Rus¬ 
sian objections had been the first stumbling block in the 
way of the Railway; Russian protests had been the instiga¬ 
tion of French opposition; now Russian recognition held 
out high promise for the final success of the Great Plan. 
The first breach had been made in the heretofore solid 
front presented by the Entente. 3 

Outside of Germany and Russia, however, the Potsdam 
Agreement met with a heated reception. The Ottoman 
press complained that Turkey was being politely ignored 
by two foreign powers in the disposition of her rights. 
One Constantinople daily said it was a sad commentary 
on Turkish “sovereignty” that in an important treaty on 
the Bagdad Railway “there is no mention of us, as if we 
had no connection with that line, and we were not masters 
of Bagdad and Basra and the ports of the Persian Gulf.” 4 
M. Hanotaux, a former French minister of foreign affairs, 
expressed his belief that “the negotiations at Potsdam 
have created a situation which, from every point of view, 
obliges us to ask, now, if Russia has dissolved the Triple 


242 


THE BAGDAD RAILWAY 


Entente.” 5 Mr. Lloyd George delivered a particularly 
venomous attack upon Russia for having disregarded her 
diplomatic engagements, and he announced in clarion tones 
that this desertion from the ranks of the Entente—even 
if condoned by France—would not cause Great Britain 
to alter one iota her former policy. 6 The “Slav peril” 
appeared to be more keenly appreciated, for the moment, 
in France and England than in Germany! 

M. Jaures, the brilliant French Socialist parliamentarian, 
believed that the Potsdam Agreement was an admirable 
instance of the menace of the Russian Alliance to the 
security of France and the peace of Europe. During the 
course of a bitter debate in the Chamber of Deputies he 
confronted the Minister of Foreign Affairs, M. Pichon, 
with this dilemma: “What is the situation in which you 
find yourself ? You are going to be faced, you already are 
faced, with a fait accompli, a Russo-German convention 
on the Bagdad question. What do you propose to do? 
Well, you may pursue an independent course and con¬ 
tinue to oppose the Bagdad Railway. In that event you 
will be in the unenviable position of opposing Germany 
in an enterprise to which Russia—whose interests are 
more directly involved—has given her support. Or, on 
the other hand, you may subscribe with good grace to this 
enterprise which Russia commends to you. What then 
will be your situation? For some years France has suc¬ 
cessfully resisted the Bagdad Railway. If during this 
time we have sulked at the enterprise, it was not of our 
own choice, but out of regard for Russia, because Russia 
believed her interests to be menaced. In short, we arrive 
at this paradox. You have created an extremely delicate 
situation between France and Germany by opposing the 
Bagdad Railway, in which you had no interests other 
than those of Russia. And now it is this same Russia 
which, without previously consulting you, places at the 


BARGAINS ARE STRUCK 


243 


disposal of Germany the moral advantage of compelling 
you—you who resisted only on behalf of Russia—to ac¬ 
cede to the Bagdad Railway.” Was this the sort of ally 
to whom France should entrust her national safety? 7 

In the midst of the storm over the Potsdam Agree¬ 
ment, M. Stephen Pichon and Sir Edward Grey alone 
appeared to be unruffled. Both of these gentlemen, in¬ 
terpolated in the Chamber of Deputies and the House of 
Commons respectively, averred that they saw no reason 
for becoming disturbed or alarmed at the new Russo- 
German understanding. This point of view was incompre¬ 
hensible to the average citizen, unskilled in the niceties of 
professional diplomacy, until on January 31, 1911, M. 
Jaures forced M. Pichon to admit that the French Foreign 
Office had been informed of the character of the Potsdam 
negotiations before they took place. Less than a month 
later Mr. Lloyd George severely criticized his fellow- 
minister Sir Edward Grey for having taken no action 
against the policy of Russia at Potsdam, although, as 
Foreign Secretary, Sir Edward had been fully posted on 
the nature of the negotiations. Apparently, then, Russia 
had come to the agreement with Germany only after hav¬ 
ing consulted France and Great Britain and, perhaps, after 
having received their consent. 8 

There were a few persons who hoped that the Potsdam 
Agreement might be the first step in a general settlement 
of the Bagdad Railway entanglement. One humble mem¬ 
ber of the House of Commons, Mr. Pickersgill, said, for 
example, “I cannot understand the policy of continued 
antagonism to Germany. Ex-President Roosevelt recently 
gave much good advice to our Foreign Minister, and 
amongst other things he said that the presence of Germany 
on the Euphrates would strengthen the position of Great 
Britain on the Nile. . . . The action of Russia in the 
recent meeting at Potsdam has brought matters to a head. 


244 


THE BAGDAD RAILWAY 


and I hope the Foreign Office will approach Turkey with 
a view to an arrangement for the completion of the Bag¬ 
dad Railway which might be agreeable to Turkey, Ger¬ 
many and ourselves.” 9 

The hope of Mr. Pickersgill was fulfilled, for the agree¬ 
ment of November 4, 1910, proved to be the first of a 
series of conventions regarding the Near East negotiated 
between 1911 and 1914 by Germany, Turkey, Great Britain 
and France. On the eve of the Great War the Bagdad 
Railway controversy had been all but settled! 

French Capitalists Share in the Spoils 

France, relieved of the necessity of supporting Russia’s 
strategic objections to the Bagdad Railway, was glad to 
compromise with Turkey—in return for compensatory 
concessions to French investors. The sharp rebuff given 
M. Pichon by the Young Turks in the loan negotiations 
of the spring and summer of 1910 had convinced French 
diplomatists and business men alike that a policy of bully¬ 
ing the new administration at Constantinople would be 
futile. 10 Continued obstruction of Ottoman economic 
rehabilitation could have but two effects: to injure French 
prestige and prejudice the interests of French business; 
to drive the Young Turks into still closer association with 
the German Government and still greater dependence upon 
German capitalists. On the other hand, a conciliatory 
policy might be rewarded by profitable participation of 
French bankers in the economic development of Turkey- 
in-Asia and by a revival of French political influence at 
the Sublime Porte. 

Even before the negotiation of the Potsdam Agreement 
the Young Turks had smiled upon French financial inter¬ 
ests in the hope that the French Government might adopt 
a more friendly attitude toward the new regime in Turkey. 


BARGAINS ARE STRUCK 


245 


In June, 1910, for example, the Smyrna-Cassaba Railway 
was authorized to extend its existing line from Soma, in 
western Anatolia, to Panderma, on the Sea of Marmora. 
The concession carried with it the highest kilometric 
guarantee (18,800 francs) ever granted a railway in the 
Ottoman Empire, although the construction of the line 
offered fewer engineering and financial difficulties than 
other railways which had been constructed under less 
favorable terms. From the standpoint of the Turkish 
Government, however, the Soma-Panderma railway offered 
economic and strategic returns commensurate with the 
investment, for it was part of a comprehensive plan for 
the improvement of commercial and military communica¬ 
tions in Asia Minor. 11 

The acceptance of this concession by French capitalists 
—presumably with the approval, certainly without the 
opposition, of their Government—was an interesting com¬ 
mentary on the official attitude of the French Republic 
toward the Bagdad Railway. If it was unprincipled for 
Germans to accept a guarantee for the construction and 
operation of their railways in Turkey, it is difficult to 
ascertain what dispensation exempted Frenchmen from 
the same stigma. If the Anatolian and Bagdad systems 
were anathema because of their possible utilization for 
military purposes, little justification can be offered for the 
Soma-Panderma line, which, completed in 1912, was one 
of the principal factors in the stubborn defence of the 
Dardanelles three years later. 

Shortly after the promulgation of the Soma-Panderma 
convention additional steps were taken by the Ottoman 
Government toward the further extension of French rail¬ 
way interests in Anatolia and Syria. Negotiations were 
initiated with the Imperial Ottoman Bank for the award 
to a French-owned company, La Societe pour la Con¬ 
struction et rExploitation du Roseau de la Mer Noire, 


246 


THE BAGDAD RAILWAY 


of a concession for a comprehensive system of railways 
in northern Anatolia. It was proposed to construct elabo¬ 
rate port works at the Black Sea towns of Heraclea, 
Samsun, and Trebizond, and to connect the new ports by 
railway with the inland towns of Erzerum, Sivas, Kharput, 
and Van. Connections were to be established at Boli and 
Sivas with extensions to the Anatolian Railways, and at 
Arghana with a branch of the Bagdad line to Nisibin and 
Diarbekr. Thus adequate rail communications would be 
provided from the SEgean to the Persian Gulf, from the 
Black Sea to the Syrian shore of the Mediterranean. 12 

Simultaneously, negotiations were being carried on be¬ 
tween the Ottoman Ministry of Public Works and the 
Imperial Ottoman Bank for extensive concessions to the 
French Syrian Railways, owned and operated by La 
Societe du Chemin de Fer dc Damas-Hama et Prolonge- 
ments. Provision was made for the construction of port 
and terminal facilities at Jaffa, Haifa, and Tripoli-in- 
Syria; a traffic agreement was negotiated with the Otto¬ 
man-owned Hedjaz Railway, pledging both parties to 
abstain from discriminatory rates and other unfair com¬ 
petition ; tentative arrangements were made for the con¬ 
struction of a line from Homs to the Euphrates. 
Provisional agreements embodying the Black Sea and 
Syrian railway and port concessions were signed in 1911, 
but technical difficulties of surveying the lines, together 
with the political instability occasioned by the Tripolitan 
and Balkan Wars, postponed the definitive contract. 13 

After the Treaty of Bucharest, August 10, 1913, the 
Ottoman Government was more determined than ever to 
do everything in its power to eliminate French opposition 
to railway construction in Asia Minor and to secure French 
aid in the further economic development of Turkey. 
Crushing defeats at the hands of the Italians and the 
Balkan states had emphasized the deficiencies of Ottoman 


BARGAINS ARE STRUCK 


247 


communications, Ottoman economic and military organ¬ 
ization, Ottoman financial resources. The national treas¬ 
ury, emptied by the drain of three wars, needed replenish¬ 
ment by an increase in the customs duties, to which French 
sanction would have to be obtained, and by a foreign loan, 
for which it was hoped French bankers would submit a 
favorable bid. All of these questions were so closely asso¬ 
ciated with the question of political influence in the Near 
East, however, that it was obviously desirable to arrive at 
some modus vivendi between French and German inter¬ 
ests in Ottoman railways and in Ottoman financial affairs. 
Accordingly, the Young Turk Government prevailed upon 
the Imperial Ottoman Bank and the Deutsche Bank to 
discuss a basis for a Franco-German agreement, and 
Djavid Bey was despatched to Paris to conduct what¬ 
ever negotiations might be necessary with the French 
Government. 

On August 19 and 20 and September 24, 25, 26, 1913, 
a series of important meetings was held in Berlin to ascer¬ 
tain upon what terms French and German investments in 
Turkey might be apportioned with the least possibility of 
conflict. German interests were represented by Dr. von 
Gwinner and Dr. Helfferich; the chief of the French 
negotiators were Baron de Neuflize, a Regent of the Bank 
of France, and M. de Klapka, Secretary-General of the 
Imperial Ottoman Bank. Supposedly the conferences were 
conducted only between the interested financiers, but the 
discussions were participated in by representatives of the 
French, German, and Ottoman foreign offices. Obstacles 
which, at the start, seemed insurmountable were overcome 
at the Berlin meetings and a series of minor conferences 
which followed. The result was one of the most impor¬ 
tant international agreements of the years immediately 
preceding the Great War—the secret Franco-German con¬ 
vention of February 15, 1914. The terms of this agree- 


248 THE BAGDAD RAILWAY 

ment, heretofore unpublished, may be summarized as 
follows: 14 

1. Northern Anatolia was recognized as a sphere of French 
influence for purposes of railway development. Arrangements 
were concluded for linking the Anatolian and Bagdad systems 
with the proposed Black Sea Railways, and traffic agreements 
satisfactory to all of the companies were ratified and appended 
to the convention. It was agreed that the port and terminal 
facilities at Heraclea should be constructed by a Franco-German 
company. 

2. Syria, likewise, was recognized as a French sphere of in¬ 
fluence. In particular, the right of the Syrian Railways to con¬ 
struct a line from Tripoli-in-Syria to Deir es Zor, on the 
Euphrates, was confirmed. A traffic agreement between the 
Bagdad and Syrian companies was ratified and appended to 
the convention. 

3. The regions traversed by the Anatolian and Bagdad Rail¬ 
ways were defined as a German sphere of influence. A neutral 
zone was established in Northern Syria to avoid infringement 
upon German or French rights in that region. 

4. The Deutsche Bank and the Imperial Ottoman Bank each 
pledged itself to respect the concessions of the other, to seek no 
railway concessions within the sphere of influence of the other, 
and to do nothing, directly or indirectly, to hinder the construc¬ 
tion or exploitation of the railway lines of the other in Asiatic 
Turkey. 

5. It was agreed that appropriate diplomatic and financial 
measures should be taken to bring about an increase in the 
revenues of the Ottoman Empire, sufficient, at least, to finance 
all of the projected railways, both French and German. Con¬ 
struction of the lines already authorized, or to be authorized, 
should be pursued, as far as possible, pari passu, each group to 
receive subsidies from the Ottoman Treasury in about the same 
proportion. 

6. The Deutsche Bank agreed to repurchase from the Imperial 
Ottoman Bank all of the latter’s shares and debentures of the 
Bagdad Railway and its subsidiary enterprises, amounting to 
Fr. 69,400,000. Payment was to be made in like value of Imperial 
Ottoman bonds of the Customs Loan of 1911, Second Series, 
which had been underwritten by a German syndicate. 

Certain observations should be made regarding the char¬ 
acter of this convention, if its full significance is to be 


BARGAINS ARE STRUCK 


249 


appreciated. It was an agreement between two great finan¬ 
cial groups in France and Germany; as such it was signed 
by M. Sergent, Sub-Governor of the Bank of France; 
M. de Klapka, Secretary-General of the Imperial Ottoman 
Bank; and Dr. Karl Helfferich, Managing Director of the 
Deutsche Bank. In addition, it was an understanding be¬ 
tween the Governments of France and Germany; as such 
it was signed by M. Ponsot, of the French Embassy in 
Berlin, and by Herr von Rosenberg, of the German For¬ 
eign Office. A speech of Chancellor von Bethmann- 
Hollweg to the Reichstag, December 9, 1913, acknowl¬ 
edged the official character of the negotiations being 
conducted by the French and German bankers. That the 
French Government considered the convention a binding 
international agreement is made perfectly clear by a 
despatch of Baron Beyens, Belgian Minister in Berlin, 
to M. Davignon, Belgian Minister of Foreign Affairs, 
February 20, 1914, in which the attention of the Belgian 
Government is officially called to the existence of the con¬ 
vention. 15 The agreement, furthermore, was acceptable to 
the Ottoman Government, for the Sultan promptly con¬ 
firmed the concessions for the new Black Sea and Syrian 
lines and for the necessary extensions to the Anatolian 
Railways. Much has been written about governmental 
support of investors in foreign countries, but, so far as 
the author has been able to ascertain, this is the first in¬ 
stance in which a financial pact and an international agree¬ 
ment have been combined in one document. No longer 
are treaties negotiated by diplomatists alone, but by 
diplomatists and bankers! 

From the standpoint of the French interests involved, 
the February convention of 1914 was an eminently satis¬ 
factory settlement of the Bagdad Railway controversy. 
French capitalists secured concessions for more than 2,000 
miles of railways in Asiatic Turkey, thus eliminating the 


250 


THE BAGDAD RAILWAY 


danger of eventual German control of all communications 
in the Ottoman Empire. The Imperial Ottoman Bank was 
relieved of the risk of carrying an investment of almost 
seventy million francs in the Bagdad enterprise—an in¬ 
vestment which had been a “frozen asset” because of the 
persistent refusal of the French Government to admit the 
Bagdad securities to the Bourse. In return, the Bank 
received a large block of Imperial Ottoman bonds, which 
were readily negotiable and which materially increased 
French influence in the Ottoman Public Debt Administra¬ 
tion. Furthermore, as a result of a tacit agreement with 
the Deutsche Bank, the Imperial Ottoman Bank was 
awarded the Imperial Ottoman Five Per Cent Loan of 
1914, amounting to $100,000,000, upon terms affording a 
handsome profit to the underwriters. 16 As for the French 
Government, it was enabled to emerge gracefully from the 
difficult situation in which it found itself after the Pots¬ 
dam Agreement. France no longer was obliged to pursue 
a purely Russian policy in the Near East, for the Tsar’s 
Government—in addition to withdrawing its objections 
to German railways in Asiatic Turkey—gave its consent 
to the construction of the French Black Sea Railways with 
the sole proviso that the system should not be completed 
in its entirety until Russia had constructed certain stra¬ 
tegic railways necessary to assure the safety of the Cau¬ 
casus frontier. 17 

German diplomacy, on the other hand, had strengthened 
its position in the Near East by securing definite recog¬ 
nition of central and southern Anatolia, northern Syria 
and Mesopotamia as German spheres of interest. German 
financiers acquired exclusive control of the Bagdad enter¬ 
prise and were assured that there would be no further 
obstruction of their plans by the French Government. The 
French promise to cooperate in improving the financial 
situation in Turkey meant that funds would be forthcom- 


BARGAINS ARE STRUCK 


251 


ing for continued construction of uncompleted sections of 
the Bagdad Railway. The Young Turks were delighted at 
the prospect that the Powers might finally consent to the 
much-needed increase in the customs duties. They were 
no less delighted to know that railway construction in 
Asia Minor—which held out so much promise for the 
economic development and the political stability of the 
country—was to go on unimpeded by Franco-German 
rivalry and antagonism. 18 

There was some harsh criticism in Great Britain, how¬ 
ever, of the advantages which France had obtained for 
herself in the Ottoman Empire. Sir Mark Sykes, an 
eminent student of Near Eastern affairs, believed that 
the new state of affairs was worse than the old. Speak¬ 
ing in the House of Commons, March 18, 1914, he warned 
the Foreign Office that “the policy of French financiers 
will produce eventually the collapse of the Ottoman Em¬ 
pire. . . . Take the proposed loan arranged with the French 
Government, for something over £20,000,000. In order 
to get this there are concessions which I cannot help feel¬ 
ing are more brazen and more fatal than any I have seen. 
The existing railways in Syria meander for miles to avoid 
legitimate profits in order to extort a guarantee. Along¬ 
side these railways you can see the merchants’ merchandise 
and the peasants’ produce rotting because the railway peo¬ 
ple do not trouble to warehouse the stuff or to shift it. 
They have got their guarantee, and they do not care. 
These concessions, which have been extracted from Tur¬ 
key, mean a monopoly of all Syrian transit; and, further, 
a native press is to be subventioned practically in the inter¬ 
est of these particular monopolies. ... In practice, loans, 
kilometric guarantees, monopolies, and a financed native 
press must, whether the financiers desire it or not, pave 
the way to annexation. I submit that this is not the spirit 
of the entente. The British people did not stand by the 



252 


THE BAGDAD RAILWAY 


French people at Agadir to fill the pockets of financiers 
whose names are unknown outside Constantinople or the 
Faris Bourse. . . . The Ottoman Empire is shaken, and 
the cosmopolitan financier is now staking out the land 
into spheres of interest. An empire may survive disaster, 
but it cannot survive exploitation. A country like Turkey, 
without legislative capacity, without understanding what 
the economics of Europe mean and at the same time rich, 
is a lamb for the slaughter.” 10 

This trenchant criticism of French policy might have 
been taken more seriously had Great Britain herself been 
actuated by magnanimous impulses. Instead, British 
financiers were joining the common scramble for conces¬ 
sions, and British statesmen were pursuing with ruthless 
avidity every means of protecting British imperial interests. 

The Young Turks Conciliate Great Britain 

The Bagdad negotiations of 1910-1911 between Sir 
Ernest Cassel and Dr. von Gwinner, on the one hand, and 
the British and Ottoman Governments, on the other, came 
to naught, it will be recalled, because of the refusal of 
Sir Edward Grey to consent to an increase in the Turkish 
customs duties. The Sublime Porte was unwilling to 
grant the economic concessions demanded by Great Britain 
as the price of her assistance in Ottoman financial stabil¬ 
ization. But the Young Turks were shrewd enough to 
keep the door open for further negotiations by removing 
the chief political objection of England to the Bagdad 
enterprise—namely, that it menaced British imperial in¬ 
terests in the region of the Persian Gulf. In the conven¬ 
tion of March 21, 1911, with the Bagdad Railway 
Company, the Ottoman Government reserved to itself 
considerable latitude in the disposition of the sections of 
the line beyond Bagdad. 20 


BARGAINS ARE STRUCK 


253 


Conversations were resumed in July, 1911, when the 
Turkish minister in London solicited of the Foreign Office 
a further statement of the conditions upon which British 
objections to the Bagdad Railway might be waived. He 
was informed that English acquiescence might be forth¬ 
coming if the Bagdad-Basra section of the railway were 
constructed by a company in which British, French, Ger¬ 
man, Russian, and Turkish capital should share equally; 
if adequate guarantees were obtained regarding the pro¬ 
tection of British imperial interests in southern Mesopo¬ 
tamia and Persia; if English capital were granted impor¬ 
tant navigation rights on the Shatt-el-Arab, including 
complete exemption of British ships and British goods 
from Ottoman tolls; if safeguards were provided against 
discriminatory and differential tariffs on the Bagdad 
system. 

These proposals met with only partial acceptance by the 
Ottoman Government. Turkey was willing to interna¬ 
tionalize the southernmost sections of the Bagdad Rail¬ 
way, but under no circumstances would she permit Russian 
participation in an enterprise which was so vital to the 
defence of the Sultan’s Empire. Turkey was prepared to 
discuss with England measures for the protection of 
legitimate British interests in the Middle East, provided 
there be no further infringement on the sovereign rights 
of the Sultan in southern Mesopotamia. Turkey agreed 
that the principle of the economic open door should be 
scrupulously observed throughout the Ottoman Empire; 
therefore she could not agree to discriminatory treatment 
in favor of British commerce on the Shatt-el-Arab, the 
Tigris, and the Euphrates. Upon these conditions the 
Ottoman minister at London was authorized to continue 
negotiations in the most friendly spirit. 21 

The Agadir crisis, which threatened war between Eng¬ 
land and Germany, and the Tripolitan War, which diverted 



254 


THE BAGDAD RAILWAY 


Turkish attention from domestic reform to defence of 
the Empire, unfortunately led to a suspension of the 
Anglo-Turkish conversations. They were not resumed 
until 1913, when Turkey found a breathing spell between 
the first and second phases of the First Balkan War. 

During the interim, however, steps were taken to remove 
the obstacles which stood in the way of an Anglo-German 
understanding. In February, 1912, Lord Haldane visited 
Berlin as the guest of the Kaiser to discuss curtailment 
of the naval programs of the two Powers and to agree 
upon other measures which would effect a rapprochement 
between Wilhelmstrasse and Downing Street. As regards 
the Bagdad Railway, Lord Haldane informed the German 
Government that he stood upon the position he had taken 
in 1907—that Great Britain was prepared to grant its 
consent to the enterprise if British political interests in 
Mesopotamia were adequately safeguarded 22 A few 
months later, Baron Marschall von Bieberstein—who for 
fifteen years had guided Germany’s destiny in the Near 
East—was transferred from Constantinople to the em¬ 
bassy at London, as the first step in an attempt to recon¬ 
cile British imperial interests with German diplomatic 
hegemony in Turkey. Almost simultaneously, Sir Harry 
Johnston, whose enthusiasm for German ventures in Asia 
Minor has already been mentioned, 23 began a quasi¬ 
official lecture tour in Germany to urge a sane settlement 
of the Near Eastern tangle. Another important develop¬ 
ment was the appointment as German Minister of Foreign 
Affairs, in January, 1913, of Herr von Jagow, who be¬ 
lieved that a great European war was inevitable unless 
England and Germany could come to terms on the Turkish 
question. 24 

In this manner the stage was set for a resumption of 
Anglo-Turkish conversations on the Bagdad Railway. In 
February, 1913, Llakki Pasha, minister plenipotentiary and 


BARGAINS ARE STRUCK 


255 

extraordinary of the Ottoman Government, arrived in 
London with instructions to leave no stone unturned to 
settle outstanding differences with Great Britain. For 
almost four months. JHakki Pasha and Sir Edward Grey 
discussed the problems of the Near East and conferred 
with Herr von Kiihlmann and Prince Lichnowsky, of the 
German embassy at London, regarding the general terms 
of a tripartite settlement of the economic and political 
questions at issue. In May, 1913* 3 - full agreement was 
reached upon the following wide range of subjects: regu¬ 
larization of the legal position in Turkey of British reli¬ 
gious, educational, and medical institutions; pecuniary 
claims of Great Britain against the Ottoman Empire; the 
Turkish veto on the borrowing powers of Egypt; Turco- 
Persian boundary disputes, particularly in so far as they 
affected oil lands; navigation of the Tigris, Euphrates, and 
Shatt-el-Arab; irrigation of the Mesopotamian valley; 
the status of Koweit. The settlements agreed upon were 
ratified by a series of treaties between Great Britain and 
Turkey, notably those of July 29, and October 21, 1913, 
and of June, 1914. Reconciliation of British and German 
interests was reserved for discussion between London and 
Berlin. 25 

In so far as concerned the Bagdad Railway, the sub¬ 
stance of the Anglo-Turkish agreements of 1913 is as 
follows: 

1. Turkey recognized the special position of Great Britain in 
the region of the Persian Gulf. Therefore, although Great 
Britain acknowledged the suzerainty of the Sultan over Koweit, 
the Ottoman Government pledged a policy of non-interference 
in the affairs of the principality. The existing treaties between 
the Sheik and Great Britain were confirmed. 

2. The terminus of the Bagdad Railway was to be Basra, 
unless and until Great Britain should give consent to an extension 
of the line to the Persian Gulf. 

3. In order to assure equality of treatment for all, regardless 
of nationality or other considerations, the Ottoman Government 




256 


THE BAGDAD RAILWAY 


agreed that two British citizens should be elected to the Board 
of Directors of the Bagdad Railway Company. 

4. Exclusive rights of navigation by steamers and barges on 
the Tigris, Euphrates, and Shatt-el-Arab were granted to the 
Ottoman River Navigation Company, to be formed by Baron 
Inchcape, chairman of the Peninsular and Oriental and the 
British India Steam Navigation Companies. The Navigation 
Company, in which Turkish capital was to be offered a fifty per 
cent participation, was to have wide powers for the improvement 
and regulation of all navigable streams in Mesopotamia, in co¬ 
operation with a commission to be appointed by the Ottoman 
Government. Lord Inchcape’s concession was for a period of 
sixty years, with optional renewals for ten-year periods. 

5. It was agreed, however, that the Bagdad Railway and 
Inchcape concessions were without prejudice to the rights of the 
Lynch Brothers, which were specifically reaffirmed. The Lynch 
Brothers, in fact, were granted the privilege of adding another 
steamer to their equipment, with the single restriction that it fly 
the Turkish flag. 

6. The British Government agreed that no navigation rights 
of its nationals would be construed as permitting interference 
with the development of Mesopotamia by irrigation, and the 
Ottoman Government guaranteed that no irrigation works would 
be permitted to divert navigable streams from their course. 

7. In return for these, and other, assurances and concessions, 
Great Britain consented to support an increase of 4% in the 
customs duties of the Ottoman Empire. 

The terms of this settlement were hailed by the English 
press as an admirable solution of the Mesopotamian 
imbroglio. The Times of May 17, 1913, for example, 
said: “Great Britain will have no further reason for look¬ 
ing askance at a project which should do much for the 
development of Asiatic Turkey. Our interests will be 
safeguarded; we have always said that a terminus at Basra 
offered no menace to specific British interests in the Per¬ 
sian Gulf; and the German promoters will be free to 
complete their great project with the benevolent acquies¬ 
cence of Great Britain. There will be no official partici¬ 
pation in the construction of the line, but there will also 
be nothing to deter British capital from being associated 


BARGAINS ARE STRUCK 


257 


with the scheme. We believe that if some such solution 
is adopted, a fertile source of international misunderstand¬ 
ing will disappear. It is a solution which should receive 
the approval of France and Russia and should give grati¬ 
fication to Germany. It appears to leave no room for 
subsequent differences of opinion, while it wipes out a 
whole series of obscure disputes. It will be a further 
demonstration of that spirit of cooperation among the 
Great Powers which has done so much of late to preserve 
the peace of Europe. It should convince Germany that 
Great Britain does not oppose the essential elements of 
the Bagdad Railway scheme provided her own special in¬ 
terests are protected. Above all, it will relieve the finan¬ 
cial disabilities of Turkey and will enable her to press 
forward the great task of binding with bonds of steel 
the great Asiatic territories in which her future chiefly 
lies.” Other press opinion was in accord with Sir 
Edward Grey that the agreement “justifies us in saying 
that it is no longer in British interests to oppose the 
line.” 26 / 

In Germany, likewise, the Anglo-Turkish agreement 
was favorably received. The Berliner Tageblatt of De¬ 
cember 29, 1913, hailed it as a triumph of German diplo¬ 
macy. “For years,” it said, “this undertaking has 
threatened to become a bone of contention between Russia, 
England, and Germany. The German Government has 
now, through its cleverness and tenacity, succeeded in re¬ 
moving all differences and in bringing the line altogether 
into German possession.” In the Reichstag, as well, the 
general tenor of the comments was favorable, although 
Herr Bassermann and other National Liberals were some¬ 
what vociferous about the great “sacrifices” which Ger¬ 
many had made to propitiate Great Britain. Among the 
Social Democrats and the Centrists, however, the senti¬ 
ment was obviously in accord with one member who 


258 


THE BAGDAD RAILWAY 


said, “We share the general satisfaction at this rap¬ 
prochement, which is an aid to world peace, but we also 
are of the opinion that there is no occasion for over- 
exuberance or patriotic bombast/' 27 

As usual, the role of the Turks themselves was slighted. 
A casual observer might have remarked that whatever 
“benevolent acquiescence” was included in the settlement 
originated in Constantinople rather than in London, and 
that the “sacrifices” involved were much more painful to 
Turkey than to Germany! 

British Imperial Interests Are Further 

Safeguarded 

In the Speech from the Throne, February 10, 1914, 
King George V informed Parliament that the Near East¬ 
ern question was approaching a solution. “My relations 
with foreign Powers continue to be friendly,” he said. “I 
am happy to say that my negotiations, both with the Ger¬ 
man Government and the Ottoman Government as regards 
matters of importance to the commercial and industrial 
interests of this country in Mesopotamia are rapidly ap¬ 
proaching a satisfactory issue.” Nothing was said to 
indicate the character of the negotiations or to identify the 
“commercial and industrial interests” which were the 
objects of royal solicitude. 

Before the British Government would give its consent 
to a final agreement with Turkey and Germany regard¬ 
ing the Bagdad Railway, the King might have added, it 
was determined to acquire for certain worthy Britons a 
share in some of the choicest economic plums in the 
Ottoman Empire. Heading the interests which were thus 
to be favored was the Right Honorable James Lyle 
Mackay, Baron Inchcape of Strathnaver, who had been the 
beneficiary of the aforementioned Mesopotamian naviga- 


BARGAINS ARE STRUCK 


259 


tion concession of July, 1913. Lord Inchcape is perhaps 
the foremost shipping magnate in the British Empire. He 
is chairman and managing director of the Peninsular 
and Oriental and the British India Steam Naviga¬ 
tion Companies ; chairman and director of the Australasian 
United Steam Navigation Company and the Eastern and 
Australian Steamship Company; a director of the Steam¬ 
ship Owners’ Coal Association, the Australasia and China 
Telegraph Company, the Marine Insurance Company, the 
Central Queensland Meat Export Company, and various 
other commercial enterprises. He is a vice-president of 
the Suez Canal Company. He has extensive interests in 
the petroleum industry as a director of the Anglo-Persian 
Oil Company, Scottish Oils, Ltd., and the D’Arcy Ex¬ 
ploration Company. 

Lord Inchcape’s interests were given ample considera¬ 
tion in the Anglo-German negotiations of 1914. On 
February 23, a contract was signed at London between 
the Bagdad Railway Company and Lord Inchcape, the 
signatures to which were witnessed by Herr von Kiihl- 
mann, of the German embassy, and Sir Eyre Crowe, of 
the British Foreign Office. Under the terms of this 
contract the Bagdad Railway Company acknowledged the 
monopolistic privileges in Mesopotamian river navigation 
conferred upon Lord Inchcape’s interests by the Ottoman 
Government; agreed to cancel its outstanding engagements 
with the Lynch Brothers for the transportation of rail¬ 
way materials between Basra and points along the Tigris; 
and guaranteed Lord Inchcape a minimum amount of 
100,000 tons of freight, at a figure of 223/2 shillings per 
ton, in the transportation on the Tigris of supplies for 
the construction of the Bagdad Railway and its subsidiary 
enterprises. 28 

This contract was so obviously in contravention of 
earlier rights of the Lynch Brothers, which had been 


2,6 o 


THE BAGDAD RAILWAY 


specifically reaffirmed by the negotiations with Turkey, 
that it was amended by an agreement of March 27, 1914, 
between Lord Inchcape, Mr. John F. Lynch, and the Bag¬ 
dad Railway Company. The latter arrangement provided : 
I. That Lord Inchcape should immediately organize the 
Ottoman Navigation Company to take over the concession 
of July, 1913, and the rights conferred upon Lord Inch¬ 
cape by his agreement of February 23, 1914, with the 
Bagdad Railway Company; 2. That the Lynch Brothers 
should be admitted to participation in the new Navigation 
Company and that Mr. John F. Lynch should be elected 
a director thereof; 3. That the Bagdad Railway should 
assign to a new Ottoman Ports Company—in which Mr. 
Lynch and Lord Inchcape should be granted a 40% 
participation—all of the rights of the Railway to the con¬ 
struction of port and terminal facilities at Bagdad and 
Basra; 4. That the Bagdad Railway Company should be 
granted a 20% participation in the new Ottoman Naviga¬ 
tion Company. Thus were Lord Inchcape’s powerful 
interests further propitiated! Thus did the Lynch 
Brothers cease to be big fish in a small pond, to become 
small fish in a big lake! 

Measures were now taken to protect another vested 
interest, the British-owned Smyrna-Aidin Railway Com¬ 
pany. On March 26, a draft agreement, subsequently 
confirmed as part of the Anglo-German convention of 
June 15, was executed by Dr. Carl Bergmann, of the 
Bagdad Railway Company, and Lord Rathmore, of the 
Smyrna-Aidin Company. It provided for important 
extensions of over 200 miles to the existing Smyrna- 
Aidin line (including a junction with the Anatolian- 
Bagdad system at Afiun Karahissar), granted to British 
interests valuable navigation rights on the lakes of Asia 
Minor, and protected each railway from discriminatory 
treatment at the hands of the other. This settlement was 


BARGAINS ARE STRUCK 


261 


approved by Herr von Kuhlmann, on behalf of the Ger¬ 
man Government; Mr. Alwyn Parker, of the British 
Foreign Office; and Hakki Pasha, minister plenipotentiary 
of the Sultan to the Court of St. James. 29 

Oil—the magic word which has become the open sesame 
of so many diplomatic mysteries—was of no inconsider¬ 
able importance in 1914. Early in that eventful year the 
British Government—in order to insure an uninterrupted 
supply of fuel to the fleet—had purchased a controlling 
interest in the Anglo-Persian Oil Company. As a neces¬ 
sary step in the negotiations regarding Turkish oilfields 
the German Government was obliged, in March, 1914, to 
recognize southern Mesopotamia, as well as central and 
southern Persia, as the exclusive field of operations of 
the Anglo-Persian Company, and, in addition, to agree 
to the construction of a railway from Kut-el-Amara to 
Mendeli for the purpose of facilitating petroleum ship¬ 
ments. Thereupon an Anglo-German syndicate organized 
the Turkish Petroleum Company for the acquisition and 
exploitation of the oil resources of the vilayets of Mosul 
and Bagdad. Half of the stock of the new company was 
assigned to the National Bank of Turkey (controlled by 
Sir Ernest Cassel) and the D’Arcy group (in which Lord 
Inchcape was interested) ; one quarter was assigned to 
the Royal Dutch Company, and the remainder was re¬ 
served for the Deutsche Bank. Upon joint representations 
by the British and German ambassadors at the Sublime 
Porte, the Sultan, in June, 1914, conferred upon the Turk¬ 
ish Petroleum Company exclusive rights of exploitation 
of the oil resources of the Mesopotamian valley from 
Mosul to Bagdad. 30 

The vested interests of certain of its citizens having thus 
been amply protected, the British Government proceeded 
to complete its negotiations with the German ambassador 
in London. On June 15, 1914, Sir Edward Grey and 


2 62 


THE BAGDAD RAILWAY 


Prince Lichnowsky initialed an important convention re¬ 
garding the delimitation of English and German interests 
in Asiatic Turkey. The following day The Times an¬ 
nounced that the terms of an Anglo-German agreement 
had been incorporated in a draft treaty, and on June 29, 
Sir Edward Grey informed the House of Commons that 
formal ratification of the convention was being postponed 
only “until Turkey and Germany have completed their 
own separate negotiations.” By mid-July all was in readi¬ 
ness for the definitive signing of the treaty, but the widen¬ 
ing importance of the Austro-Serbian dispute and the out-' 
break of the Great War put an end to the Bagdad Railway 
conversations. 31 

The terms of the convention of June 15, 1914—which 
might have meant so much to the future of Anglo- 
German relations—constituted a complete settlement of 
the controversy which had waged for more than ten 
years over German railway construction in the Meso¬ 
potamian valley. The reconciliation of the divergent in¬ 
terests of the two Powers was based upon the following 
considerations: 32 

1. “In recognition of the general importance of the Bagdad 
Railway in international trade” the British Government bound 
itself not “to adopt or to support any measures which might 
render more difficult the construction or management of the 
Bagdad Railway by the Bagdad Railway Company or to prevent 
the participation of capital in the enterprise.” Great Britain 
further agreed that under no circumstances would it “undertake 
railway construction on Ottoman territory in direct competition 
with lines of the Bagdad Railway Company or in contravention 
of existing rights of the Company or support the efforts of any 
persons or companies directed to this end,” unless in accord with 
the expressed wishes of the German Government. 

2. His Britannic Majesty’s Government pledged itself to sup¬ 
port an increase in the customs duties of the Ottoman Empire 
from 11% to 15% ad valorem and, furthermore, to “raise no 
objection to the assignment to the Bagdad Railway Company of 
already existing Turkish State revenues, or of revenues from the 


BARGAINS ARE STRUCK 


263 


intended increase in tariff duties, or of the proposed monopolies 
or taxes on the consumption of alcohol, petroleum, matches, 
tinder, cigarette-paper, playing cards, and sugar to the extent 
necessary for the completion of the Railway.” 

3. The terminus of the Bagdad Railway was to be Basra. 
Both of the signatory Powers declared that under no circum¬ 
stances would they “support the construction of a branch from 
Basra or any other point on the main line of the Bagdad Railway 
to the Persian Gulf, unless a complete understanding be pre¬ 
viously arrived at between the Imperial Ottoman, the Imperial 
German, and His Britannic Majesty’s Governments.” The Ger¬ 
man Government furthermore pledged itself under no circum¬ 
stances to “undertake the construction of a harbor or a railway 
station on the Persian Gulf or support efforts of any persons 
or companies directed toward that end, unless a complete agree¬ 
ment be previously arrived at with His Britannic Majesty’s 
Government.” 

4. The German Government undertook to see that “on the 
lines of the Bagdad Railway Company, as hitherto, no direct or 
indirect discrimination in transit facilities or freight rates shall 
be made in the transportation of goods of the same kind between 
the same places, either on account of ownership or on account 
of origin or destination of the goods or because of any other 
consideration.” In other words, the German Government agreed 
to enforce Articles 24 and 25 of the Specifications of March 5, 
1903, which provided that “all rates, whether they be general, 
special, proportional, or differential, shall be applicable to all 
shippers and passengers without distinction,” and which pro¬ 
hibited the Company to enter into any agreement for the purpose 
of granting reductions in the rates announced in its published 
tariffs. 

5. In order further to protect British interests the German 
Government assumed responsibility for the election to the Board 
of Directors of the Bagdad Railway Company of “two English 
members acceptable to His Britannic Majesty’s Government.” 

6. Both Powers pledged themselves unreservedly to observe 
the principle of the economic open door in the operation of rail¬ 
way, ports, irrigation, and navigation enterprises in Turkey-in- 
Asia. 

7. Great Britain recognized German interests in the irrigation 
of the Cilician plain, and Germany recognized British interests 
in the irrigation of the lower Mesopotamian valley. 

8. Both signatory Powers took cognizance of and agreed to 
observe the Anglo-Turkish agreement of July, 1913, conferring 
important navigation rights in Mesopotamia upon British sub- 


264 


THE BAGDAD RAILWAY 


jects; the agreements between Lord Inchcape and the Bagdad 
Railway Company, regarding navigation and port and terminal 
facilities on the Tigris and Euphrates; the agreement between 
the Smyrna-Aidin Railway and the Bagdad Railway regarding 
important extensions to the former line. 

9. Great Britain and Germany agreed to “use their good 
offices with the Imperial Ottoman Government to the end that 
the Shatt-el-Arab shall be brought into a satisfactory navigable 
condition and permanently maintained in such condition, so that 
ocean-going ships may always be assured of free and easy access 
to the port of Basra, and, further, that the shipping on the 
Shatt-el-Arab shall always be open to ocean-going ships under 
the same conditions to ships of all nations, regardless of the 
nationality of the ships or their cargo.” 

10. It was agreed, finally, that any differences of opinion re¬ 
sulting from the convention or its appended documents should 
be subject to arbitration. If the signatory Powers were unable 
to agree upon an arbitrator or a special court of arbitration, the 
case was to be submitted to the Permanent Court of Arbitration 
at the Hague. 

From both the German and the British points of view 
the foregoing convention was an admirable solution of 
the Turkish problem. Had the agreement been reached 
ten years earlier, it might have avoided estrangement be¬ 
tween the two nations. Had it come at almost any other 
time than on the eve of the Great War, it would have been 
a powerful stimulus to an Anglo-German rapprochement. 

Germany, it is true, was obliged to abandon any hope 
of establishing a port on the Persian Gulf. But there 
were grave uncertainties that Koweit could ever be de¬ 
veloped as a commercially profitable terminus for the Bag¬ 
dad Railway, whereas its very possession by a German 
company would have been a constant source of irritation 
to Great Britain. Basra, on the other hand, had obvious 
advantages. Like many of the great harbors of the world 
—Hamburg, Bremen, Antwerp, London, New York—it 
was on a river, rather than the open sea; and inasmuch as 
Great Britain had agreed that the freedom of the open 
sea should be applied to the Shatt-el-Arab, German ships 


BARGAINS ARE STRUCK 265 

were assured unrestricted access to the southern terminus 
of the Bagdad Railway. In return for surrendering the 
Basra-Persian Gulf section of the Bagdad system and 
for admitting British capitalists to participation in the 
Bagdad and Basra ports company, Germany received full 
recognition of her economic rights in Anatolia, Syria, and 
northern Mesopotamia, together with a minor share in 
Lord Inchcape’s navigation enterprises and in the newly 
formed Turkish Petroleum Company. Above all, British 
opposition to the Bagdad Railway, which had been so 
stubbornly maintained since 1903, was to be a thing of the 
past. For these considerations Germany could well afford 
to accept a subordinate place in southern Mesopotamia 
and to recognize British interests in the Persian Gulf. 

Great Britain gained even more than Germany. She 
abandoned her policy of obstruction of the Bagdad Rail¬ 
way and consented to an increase in the customs duties of 
the Ottoman Empire. These considerations had never 
been ends in themselves, but rather pawns in the great 
game of diplomacy, to be surrendered in return for other 
valuable considerations. For them England secured guar¬ 
antees of equality of treatment for British citizens and 
British goods on the German railway lines in Turkey. In 
addition, English capitalists received a monopoly of navi¬ 
gation on the Tigris and Euphrates, a 40% interest in 
port and terminal facilities at Bagdad and Basra, control 
of the oil resources of the Mesopotamian valley, extensions 
to British-owned railways in southern Anatolia, and other 
valuable economic concessions. British political control 
was recognized as dominant in southern Mesopotamia; 
therefore the Bagdad Railway no longer could be said to 
be a menace to the safety of India. As for Britain’s new 
position in the Persian Gulf, one of her own publicists 
said, “England has virtually annexed another sea, one 
of the world’s highways.” 33 


266 


THE BAGDAD RAILWAY 


Diplomatic Bargaining Fails to Preserve Peace 

It is one of the tragedies of pre-War diplomacy that 
the negotiations of 1910-1914 failed to preserve peace in 
the Near East or, at least, to prevent the entry of Turkey 
into the Great War. But the failure of the treaties be¬ 
tween Germany and the Entente Powers regarding the 
Ottoman Empire can be traced, in general, to the same 
reasons that contributed to the collapse of all diplomacy 
in the crisis of 1914. Imperialism, nationalism, militar¬ 
ism—these were the causes of the Great War; these were 
the causes of Ottoman participation in the Great War. 

One obvious defect of the Potsdam Agreement, the 
Franco-German agreement regarding Anatolian railways, 
the Anglo-Turkish settlement of 1913, and the Anglo- 
German convention regarding Mesopotamia, was the fact 
that they were founded upon the principle of imperial 
compensations. Each of the Great Powers involved made 
“sacrifices”—but in return for important considerations. 
And throughout all of the bargaining the rights of Turkey, 
a “backward nation,” were completely ignored. As the 
German ambassador in London wrote: “The real purpose 
of these treaties was to divide Asia Minor into spheres of 
interest, although this expression was anxiously avoided, 
out of regard for the rights of the Sultan. ... By virtue 
of the treaties all Mesopotamia as far as Basra became 
our sphere of interest, without prejudice to older British 
rights in the navigation of the Tigris and in the Willcocks 
irrigation works. Our sphere further included the whole 
region of the Bagdad and Anatolian Railways. The Brit¬ 
ish economic domain was to include the coasts of the Per¬ 
sian Gulf and the Smyrna-Aidin line; the French, Syria; 
the Russian, Armenia.” 34 J 

In the scramble for concessions in Asia Minor, Italy 
had been overlooked. The proposed extension of the 


BARGAINS ARE STRUCK 


267 

Smyrna-Aidin Railway met with vehement denunciation 
on the part of patriotic Italians who looked forward to 
the further development of Italian economic influence in 
the hinterland of the port of Adalia. The Italian press 
loudly demanded that energetic action be taken by the 
Government to secure from Turkey compensatory con¬ 
cessions or, in default of that, to announce to the Sublime 
Porte that Italy would not return to Turkey the Dode¬ 
canese Islands, of which Italy was in temporary occupation 
under the terms of the Treaty of Lausanne (1912). A 
formal demand of this character was made by King Vic¬ 
tor Emmanuel’s ambassador at Constantinople, but was 
met with a curt refusal on the part of the Turks to bar¬ 
gain for the return of their own property. 35 

The Young Turks were not unaware of the true char¬ 
acter of the agreements they had entered into with the 
respective European Powers, but they considered them¬ 
selves impotent to act otherwise at the time. They knew 
full well that there was grave danger in an extension of 
British influence in Mesopotamia, French interests in 
Syria, and Franco-Russian enterprise in northern Ana¬ 
tolia. They had not forgotten the spoliation of their 
empire by Austria-Hungary and Italy. They were not 
altogether unsuspicious about the intentions of Germany. 
But they believed they could never emancipate their 
country from foreign domination until they had modern¬ 
ized it. They needed foreign capital and foreign technical 
assistance, and they had to pay the price. In order to 
throw off the yoke of European imperialism they had to 
consent temporarily to be victimized by it. 36 

Nationalistic fervor added to the difficulties created by 
imperialist rivalry. M. Andre Tardieu, political editor at 
the time of Le Temps, did not let a single opportunity 
pass during February and March, 1914, to denounce the 
French Government for its pro-German policy in the Bag- 


268 


THE BAGDAD RAILWAY 


dad Railway question. When M. Cambon, French am¬ 
bassador at Berlin, was asked whether the Franco-German 
agreement on Turkish railways would improve the rela¬ 
tions between his country and the German Empire, he 
said: “Official relations, yes, perhaps to some extent, but 
I do not think that the agreement will affect the great body 
of public opinion on both sides of the Vosges. It will not, 
unfortunately, change the tone of the French press to¬ 
wards the Germans. . . . There is no doubt whatever that 
the majority, both of Germans and Frenchmen, desire to 
live at peace; but there is a powerful minority in each 
country that dreams of nothing but battles and wars, either 
of conquest or revenge. That is the peril that is always 
with us; it is like living alongside a barrel of gunpowder 
which may explode on the slightest provocation.” Herr 
von Jagow, German Minister of Foreign Affairs, ex¬ 
pressed a similar opinion when he said that he was watch¬ 
ing for a favorable moment for the publication of the 
Anglo-German convention of June 15, 1914—“an appro¬ 
priate moment when the danger of adverse criticism was 
no longer so acute.” 37 Hatred, suspicion, fear, and other 
unbridled passions were the stock-in-trade of the Conti¬ 
nental press during the months preceding the outbreak 
of the Great War. Patriotic bombast, not international 
conciliation, was demanded by the imperialist and national¬ 
ist minorities, who exerted only too much influence upon 
the Governments and made politicians fear lest their 
efforts at peace be misconstrued as treason! 

A situation which was made bad by imperial rivalries 
and national antagonisms was made intolerable by mili¬ 
tarism. During the year 1913-1914, when the diplomatists 
were working for peace, preparations were being made for 
war. In the month of August, 1913, while conversations 
were being held in Berlin to reconcile French and German 
interests in the Near East, General Joffre was on his way 


BARGAINS ARE STRUCK 


269 


to Russia to confer with the Tsar’s general staff regard¬ 
ing the reorganization of the Russian army. In October 
of the same year, while tripartite negotiations were being 
conducted by England, Turkey, and Germany regarding 
Mesopotamia, General Liman von Sanders was despatched 
to Constantinople by the Kaiser as head of a German mili¬ 
tary mission to rebuild the Ottoman army and improve 
the Ottoman system of defence. Considerations of mili¬ 
tary strategy were vitiating the efforts of conciliatory 
diplomacy. 

The mission of Liman von Sanders created a crisis at 
Constantinople. The Russian, French, and British am¬ 
bassadors protested against such an obvious menace to 
the interests of the Entente. Russia, in particular, ob¬ 
jected to the announced intention of the German general 
to strengthen the defences of the Straits. All three of the 
Powers expressed opposition to the further proposal that 
Field Marshal von Sanders be placed in command of the 
First Army Corps, with headquarters at Constantinople. 
The Ottoman Government replied that it meant no offence 
to England or France, but that it could not allow its mili¬ 
tary policy to be determined by Russia. It called attention 
to the fact that the improvement of the navy was in the 
hands of a British mission and that the reorganization 
of the gendarmerie was going on under the direction of a 
French general. German officers were being asked to 
perform similar services for the army because the great 
majority of Turkish officers had completed their training 
in Germany, and the rest, since the days of General von 
der Goltz Pasha, had been educated and experienced in 
German methods. To change from German to French or 
British technique appeared to the Ottoman Minister of 
War an extremely inadvisable procedure. 38 

Although the storm over Liman von Sanders cleared 
by February, 1914, it left behind it certain permanent 


270 


THE BAGDAD RAILWAY 


effects. It strengthened German influence at Constanti¬ 
nople, indirectly because of the increased Turkish hostil¬ 
ity to Russia and suspicion of France and England, 
directly because of the presence of hundreds of German 
staff and regimental officers who used every opportunity 
to increase German prestige in the army and the civil 
services. The German ambassador at the Sublime Porte, 
Baron von Wangenheim, readily capitalized this prestige 
in the interest of German diplomacy. A formal Turco- 
German alliance was rapidly passing from the realm of 
the possible to the realm of the probable. 

In the meantime feverish efforts were being made to 
complete Turkey’s military preparations. In March, 1914, 
at the request of the Minister of War, a conference was 
held of representatives of all railways in Asiatic Turkey 
to discuss the utilization of Ottoman rail communications 
for mobilization in the event of war. Under the guidance 
of German and Turkish staff officers a plan was adopted 
by which the respective railways agreed to merge their 
services into a unified national system for the transporta¬ 
tion of troops. Throughout the spring of 1914 the defences 
of the Dardanelles were being strengthened, schools were 
being conducted for junior officers and non-commissioned 
officers, the General Staff was reorganized, new plans for 
mobilization were in process of completion. On July 23, 
1914, the handiwork of Field Marshal Liman von Sanders 
Pasha was exhibited in a great national military review. 
On that occasion Baron von Wangenheim said to the 
Ottoman Minister of Marine: “Djemal Pasha, just look 
at the amazing results achieved by German officers in a 
short time. You have now a Turkish army which can be 
compared with the best organized armies in the world! 
All German officers are at one in praising the moral 
strength of the Turkish soldier, and indeed it has proved 
itself beyond all expectation. We could claim we have 


BARGAINS ARE STRUCK 


271 


won a great victory if we could call ourselves the ally of 
a Government which has such an army at its disposal!” 39 
A few days later the Ottoman Empire was admitted to 
the Triple Alliance—with the consent of Austria, but 
without even the knowledge of Italy. The die was cast 
for Turkey’s participation in the War of the Nations! 40 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

* Statement of Chancellor von Bethmann Hollweg to the 
Reichstag, December 10, 1910, in Stenographische Berichte, XII 
Legislaturperiode, 2 Session, Volume 262, pp. 3561b et seq. Cf., 
also, The Annual Register, 1910, pp. 314-315, 335-336; Shuster, 
op. cit., pp. 225 et seq. The informal agreement reached at 
Potsdam was confirmed by a treaty of August 19, 1911. The 
Annual Register, 1911, pp. 357-358. For the diplomatic corre¬ 
spondence arising out of the Potsdam Agreement cf. de Sie- 
bert, op. cit., Chapter IX. 

“Korff, op. cit., pp. 163-164. Baron Korff believes, also, that 
the Potsdam Agreement was forced upon the weak and vacillat¬ 
ing Nicholas II by the unscrupulous and bullying William II. 

3 Supra, pp. 65-66, 147-153. For German estimates of the im¬ 
portance of the Potsdam Agreement see a reasoned and temperate 
speech by Dr. Spahn, of the Catholic Centre, and an impassioned 
and boisterous speech by Herr Bassermann, of the National 
Liberals. Stenographische Berichte, XII Legislaturperiode, 2 
Session, Volume 266 (1911), pp. 5973 et seq., 5984 et seq. 

4 The Times, January 18, 1911. 

“Quoted by W. M. Fullerton, Problems of Power (new and 
revised edition, New York, 1915), p. 171. 

8 Parliamentary Debates, House of Commons, fifth series, Vol¬ 
ume 21 (1911), pp. 241-244. 

7 Journal Ofliciel, Debats parlementaires, Chambre des Deputes, 
January 13, 1911, pp. 33-34. M. Jaures was one of the French¬ 
men who felt that their Government never should have opposed 
the Bagdad Railway in the first instance. 

9 Ibid., January 16, pp. 64 et seq.; Parliamentary Debates, 
House of Commons, Volume 21 (1911), pp. 82 et seq., 243-244; 
The Times, January 17 and 19, 1911. 

9 Parliamentary Debates, House of Commons, Volume 21 
(1911), p. 82. 

M Cf. supra, pp. 224-225. 

11 Cf. G. Saint-Yves, “Les chemins de fer frangais dans la 
Turquie d’Asie,” in Questions diplomatiques et coloniales, Volume 
37 (1914), PP- 526 - 53 U Anatolia, pp. 51-52. 


272 


THE BAGDAD RAILWAY 


13 It was proposed that the Anatolian Railways should con¬ 
struct three branches: one from a point east of Bulgurlu north 
and northeast to Kaisarieh and Sivas; a second from Angora 
east to the aforementioned branch, joining it near Kaisarieh; a 
third from Adabazar to Boli. The branch of the Bagdad Rail¬ 
way from Nisibin to Diarbekr and Arghana was authorized by 
the concession of 1903. 

13 Much of the present account of the negotiations of the years 
1910-1914 is based upon documentary material furnished by Dr. 
von Gwinner and upon additional information supplied by Sir 
Henry Babington Smith and Djavid Bey. Almost everything 
heretofore published has been very general in character, but 
one may find some illuminating details in the following: R. de 
Caix, “La France et les chemins de fer de l’Asie turque,” in 
Questions diplomatiques et coloniales, Volume 36 (1913)* PP- 
386-387; Armenia and Kurdistan, p. 36; Commerce Reports, No. 
18a (1915), pp. 2-3; Stenographische Berichie, XIII Legislatur- 
periode, 1 Session, Volume 291 (1913), PP- 6274c et seq.; Ameri¬ 
can Journal of International Law, April, 1918; Commandant de 
Thomasson, “Les negociations franco-allemandes,” in Questions 
diplomatiques et coloniales, Volume 37 (1914), pp. 257 et seq. 

14 For certified copies of the minutes of the meetings of 
August 19-20 and September 24-26, 1913, and for the text of 
the convention of February 15, 1914, the author is indebted to 
Dr. von Gwinner. 

18 Stenographische Berichte, XIII Legislaturperiode, 1 Session, 
Volume 291 (1913), p. 6274c. No. in of a series of despatches 
published by the German Foreign Office (Berlin, 1915), an 
English translation of which is to be found in E. D. Morel’s 
Diplomacy Revealed (London, 1921), pp. 282-283. 

18 Parliamentary Papers, No. Cmd. 964 (1920). 

17 Cf. de Caix, op. cit., pp. 386-387. 

18 It should be made clear that not all the terms of the Franco- 
German agreement were carried out before the beginning of the 
Great War. Because of the delay in the negotiations with Great 
Britain (cf. infra ) the exchange of Bagdad Railway securities 
for Imperial Ottoman Bonds was not completed, with the result 
that, when the War came, French bankers still held an interest in 
the Bagdad Railway Company. 

19 Parliamentary Debates, House of Commons, fifth series, 
Volume 59 (1914), pp. 2179-2189. Sir Mark Sykes (1879-1919) 
had traveled extensively in the Near and Far East and was the 
author of many books on the political and economic problems of 
those regions. During the Great War he was commissioned by 
the British Government to negotiate with France regarding the 


BARGAINS ARE STRUCK 


273 


delimitation of the Allies’ interests in Mesopotamia and Syria. 
He was one of the authors of the Sykes-Picot Treaty of 1916. 

20 Supra, pp. 111-112, 228-229. 

“Memorandum of Djavid Bey, cited in Chapter IX, supra. 

22 Haldane, op. cit., passim; W. von Hohenzollern, My Memoirs, 
1878-1918, pp. 142-156; supra, pp. 198-199; The Annual Register, 
1912, pp. 16, 332; Count de Lalaing, Belgian Minister in London, 
to M. Davignon, Belgian Minister of Foreign Affairs, February 9 
and 16, 1912, despatches Nos. 88 and 90, translated in Morel, op. 
cit., pp. 228-230. 

23 Supra, pp. 205-207. 

24 Baron Marschall died in September, 1912, after only a few 
weeks of service at his new post. He was succeeded by Prince 
Lichnowsky, who took up his duties in London in November. 
Regarding the lecture tour of Sir Harry Johnston see the authen¬ 
tic account by Bernadotte Schmitt, England and Germany, 1740- 
1914, pp. 355-356. Herr von Jagow’s opinion of the importance 
of an Anglo-German understanding on the Near East is to be 
found in his reply to Prince Lichnowsky, in the Norddeutsche 
Allgemeine Zeitung of March 23, 1918, translated by Munroe 
Smith, The Disclosures from Germany, pp. 130-131. 

25 Regarding the Anglo-Turkish negotiations cf. Parliamentary 
Debates, House of Commons, Volume 53 (1913), PP- 39 2 ~ 395 '> 
Stenographische Berichte, XIII Legislaturperiode, 1 Session, 
Volume 291 (1913), pp. 6274c-6294d; Karl Helfferich, Die Vor- 
geschichte des Weltkrieges, pp. 143 et seq.; Mesopotamia, pp. 
97-98; The Times (London), May 17 and May 31, 1913; The 
Quarterly Review, Volume 228 (1917)* PP- 517-521; de Siebert, 
op. cit., Chapter XX. 

26 Parliamentary Debates, House of Commons, Volume 53 
(1913), P- 393 - 

37 Stenographische Berichte, XIII Legislaturperiode, 1 Session, 
Volume 289 (1913), P- 4744d- Cf., also, ibid., pp. 4744C-4746C; 
Volume 290 (1913), P- 5326a-c. 

23 For copies of this and other agreements the author is in¬ 
debted to Dr. von Gwinner, of the Deutsche Bank. 

29 For the text of the agreement cf. E. M. Earle, “The Secret 
Anglo-German Convention of 1914 regarding Asiatic Turkey,” 
in the Political Science Quarterly (New York), Volume 
XXXVIII (1923), PP- 4 I- 44 - 

80 “Correspondence between His Majesty’s Government and the 
United States Ambassador respecting Economic Rights in 
Mandated Territories,” Parliamentary Papers, No. Cmd. 675 
(1921) ; The Daily News (London), June 26, 1920; G. Slocombe, 
“The Oil Behind the War Scare,” in The Daily Herald (Lon- 


274 THE BAGDAD RAILWAY 

\ 1 

don), October 12 and 13, 1922; The Disclosures from Germany, 

p. 238. 

J1 Parliamentary Debates, House of Commons, Volume 64 
(1914), pp. 116-117. 

” For the complete text of the convention, cf. E. M. Earle, 
“The Secret Anglo-German Convention of 1914 regarding Asiatic 
Turkey,” loc. cit., pp. 24-44. 

33 Fullerton, op. cit., p. 307. 

“Prince Lichnowsky, quoted from The Disclosures from Ger¬ 
many, pp. 71-72. 

33 Saint-Yves, loc. cit., pp. 526-531; Anatolia, pp. 49 et seq. 
Regarding the earlier development of Italian economic interests in 
Turkey cf. supra, pp. 105-107. 

3a For an interesting discussion of this point see Ahmed Djemal 
Pasha, Erinnerungen eines tiirkischen Staatsmannes (Munich, 
1922), translated into English under the title, Memories of a 
Turkish Statesman, 1913-1919 (New York, 1923), pp. 107-115 of 
the translation, pp. 113-122 of the German text. (Hereafter page 
references are given for the translation only). 

37 Baron Beyens, Belgian minister in Berlin, to M. Davignon, 
Belgian Minister of Foreign Affairs, No. iji of the Belgian 
documents, translated in Morel’s Diplomacy Revealed, p. 283. 
The quotation from von Jagow is from The Disclosures from 
Germany, p. 251. 

38 Regarding the German military mission to Turkey cf. Djemal 
Pasha, op. cit., pp. 65-70, 101-102; Liman von Sanders, Fiinf 
Jahre Tiirkei (Berlin, 1919) ; Field Marshal von der Goltz, Die 
Militarische Lage der Tiirkei nach dem Balkankriege (Berlin, 
1913) ; The Disclosures from Germany, pp. 57 et seq. 

38 Djemal Pasha, op. cit., p. 108. 

40 Ibid., pp. 107-115. Regarding other aspects of German 
military and diplomatic successes in Turkey during 1914, cf. 
Anatolia, pp. 44-45; Henry Morgenthau, Ambassador Morgen- 
thau’s Story (New York, 1918) ; Karl Helfferich, Die deutsche 
Turkenpolitik, pp. 28 et seq., and Die Vorgeschichte des Welt- 
krieges, passim; Andre Cheradame, The Pan German Plot Un¬ 
masked (New York, 1917)—all representing widely divergent 
points of view. 


CHAPTER XI 


TURKEY, CRUSHED TO EARTH, RISES 

AGAIN 

Nationalism and Militarism Triu'mph at 

Constantinople 

The outbreak of the Great War precipitated a serious 
political crisis at Constantinople. Decisions of the utmost 
moment to the future of the Ottoman Empire had to be 
taken. Chief among these was the choice between neu¬ 
trality and entry into the war in cooperation with the 
Central Powers. Pacifists and Entente sympathizers, of 
whom Djavid Bey was perhaps the foremost, counseled 
non-intervention in the struggle. Militarists and Ger- 
manophiles, headed by Enver Pasha, the distinguished 
Minister of War, advocated early and complete observ¬ 
ance of the alliance with Germany, which called for active 
military measures against the Entente. In support of the 
pacifists were the great mass of the people, overburdened 
with taxes, worn out with military service, and weary of 
the sacrifices occasioned by the Tripolitan and Balkan 
Wars. In support of the militarists were German eco¬ 
nomic power, German military prestige, and the powerful 
emotion of Turkish nationalism. 

The case of the pacifists, like that of their opponents, 
was based frankly upon national self-interest. A great 
European war seemed to them to offer an unprecedented 
opportunity for setting Ottoman affairs in order without 
the perennial menace of foreign interference. Ottoman 
neutrality would be solicited by some of the belligerents, 
Ottoman intervention by others; during the war, how- 

275 


276 


THE BAGDAD RAILWAY 


ever, no nation could afford to bully Turkey. By clever 
diplomatic bargaining economic and political privileges of 
the greatest importance might be obtained—the Capitula¬ 
tions, for example, might be abolished. Neutral Turkey 
might grow prosperous by a thriving commerce with the 
belligerents. After the peace both victor and vanquished 
would be too exhausted to think of aggression against a 
revivified Ottoman Empire. To remain neutral was to 
assure peace, security, and prosperity. To intervene was 
to invite defeat and dismemberment. 

Militarists, however, appraised the situation differently. 
National honor demanded that Turkey go to the assistance 
of her allies. But, more than that, national security 
demanded the decisive defeat of the Entente Powers. As 
contrasted with the firm friendship of Germany for Tur¬ 
key, it was pointed out, there was the traditional policy 
of Russia to dismember the Ottoman Empire and of 
France and Great Britain to infringe upon Ottoman 
sovereignty whenever opportunity presented itself. A 
victorious Russia would certainly appropriate Constanti¬ 
nople, and as “compensations” France would take Syria 
and England Mesopotamia. By closing the Dardanelles 
and declaring war, Turkey could deal Russian economic 
and military power a blow from which the empire of 
the Tsars might never recover. By associating herself 
with the seemingly irresistible military forces of Germany, 
Turkey might once and for all eliminate Russia—the 
feared and hated enemy of both Turks and Germans— 
from Near Eastern affairs. In addition, British security 
in.Egypt might be shaken, and the French colonial empire 
in North Africa might be menaced by a Pan-Islamic 
revival. In these circumstances the war might be for 
Turkey a war of liberation, from which only the craven- 
hearted would shrink. 

For a time, however, practical considerations led to the 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 277 

maintenance of Ottoman neutrality. “To Germany the 
‘sphere of influence’ in Turkey was of far greater eco¬ 
nomic and political importance than all her ‘colonies’ in 
Africa and in the South Seas put together. The latter, 
under the German flag, were an obvious and quick prey 
to Great Britain’s naval superiority, but so long as Tur¬ 
key remained out of the war the German sphere of 
influence in Anatolia and Mesopotamia was protected 
by the neutral Crescent flag. As soon as Turkey entered 
the war, however, Great Britain’s naval superiority could 
be brought to bear upon Germany’s interests in the Near 
East as well as upon her interests in Africa and Oceanica. 
If German imperialists were devoted to a Berlin-to- 
Bagdad Mittel-Europa project, there were British im¬ 
perialists whose hearts and minds were set upon a Suez- 
to-Singapore South-Asia project. The Ottoman Empire 
occupied a strategic position in both schemes. A neutral 
Turkey, on the whole, was favorable to German imperial¬ 
ism. A Turkey in armed alliance with Germany presented 
a splendid opportunity for British imperialism.” 1 

Turkish mobilization, furthermore, was a tediously 
slow process. The construction of the Bagdad Railway, 
as we have seen, had not been completed before the out¬ 
break of the Great War. 2 There were wide gaps in 
northern Mesopotamia and in the Amanus mountains 
which made difficult the transportation of troops for the 
defence of Irak, an attack .on the Suez, an offensive in 
the Caucasus, or .the fortification of the Dardanelles. 
The entry of Turkey into the war before the completion 
of mobilization would have been of no material advan¬ 
tage to Germany and would almost certainly have brought 
disaster to the Ottoman Empire. Therefore, while the 
war went well for Germany on the French and Russian 
fronts, German influence at Constantinople was more 
concerned with creating sentiment for war and with 





278 


THE BAGDAD RAILWAY 


speeding up mobilization than with encouraging prema¬ 
ture intervention. After the Teutonic defeats at the 
Marne and in Galicia, however, active Turkish support 
was needed for the purpose of menacing Russian security 
in the Caucasus and British security in Egypt, as well 
as for bolstering up German morale. During the latter 
part of September and the month of October, Marshal 
Liman von Sanders, Baron von Wangenheim, the com¬ 
manders of the Goeben and the Breslau, and other German 
influences at Constantinople exerted the strongest,possible 
pressure on the Ottoman Government to bring Turkey 
into the war on the side of her Teutonic allies. 

On October 31, 1914, the Turkish Government took 
the fatal step of precipitating war with the Entente 
Powers, after Enver Pasha, Minister of War, and Djemal 
Pasha, Minister of Marine, were satisfied that Ottoman 
preparations were sufficiently advanced to warrant the 
beginning of hostilities. The outcome of the Bagdad 
Railway concession of 1903 was the entry of Turkey into 
the War of 1914! 3 

Discouraged by their failure to maintain the peace, and 
fearful of impending disaster to their country, Djavid 
Bey and three other members of the Ottoman ministry 
resigned their posts. There were other indications, also, 
that intelligent public opinion at Constantinople was not 
whole-hearted in support of war. But the nationalists— 
playing upon the “traditional enmity” toward Russia— 
had their way, and with an outburst of patriotic fervor 
Turkey began hostilities. In a proclamation to the army 
and navy the Sultan affirmed that the war was being 
waged for the defence of the Caliphate and the “emanci¬ 
pation” of the Fatherland: “During the last three hun¬ 
dred years,” he said, “the Russian Empire has caused our 
country to suffer many .losses in territory. And when we 
finally arose to a sentiment of awakening and regeneration 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 279 

which was to increase our national welfare and our power, 
the Russian Empire made every effort to destroy our 
attempts, either with war or with numerous machinations 
and intrigues. Russia, England, and France never for a 
moment ceased harboring ill-will against our Caliphate, 
to which millions of Mussulmans, suffering under the 
tyranny of foreign domination, are religiously and whole¬ 
heartedly devoted. And it was always these powers that 
started every misfortune that came upon us. Therefore, 
in this mighty struggle which we are undertaking, we 
once and for all will put an end to the attacks made from 
one side against the Caliphate and from the other against 
the existence of our country.’' 4 

Turcophiles in Germany were enthusiastic over Otto¬ 
man participation in the Great War. The Turkish mili¬ 
tary contribution to a Teutonic victory might not be 
decisive, but neither would it be insignificant. And Ger¬ 
man cooperation in Ottoman military ventures would 
certainly strengthen German economic penetration in the 
Near East, even though Turkish arms might not drive 
Britain out of Egypt or Russia out of the Caucasus. 
“Over there in Turkey,” wrote Dr. Ernest Jackh, “stretch 
Anatolia and Mesopotamia—Anatolia, the ‘land of sun¬ 
rise,’ Mesopotamia, an ancient paradise. Let these names 
be to us a symbol. May this world war bring to Germany 
and Turkey the sunrise and the paradise of a new era. 
May it confer upon a strengthened Turkey and a greater 
Germany the blessings of fruitful Turco-Teutonic co¬ 
operation in peace after victorious Turco-Teutonic col¬ 
laboration in war.” 5 

Asiatic Turkey Becomes One of the Stakes of the 

War 

Whatever may have been the European origins of the 
Great War, there was no disposition on the part of the 


28 o 


THE BAGDAD RAILWAY 


belligerents to overlook its imperial possibilities. A war 
which was fought for the protection of France against 
German aggression, for the defence of Belgian neutrality', 
for the recovery of Alsace-Lorraine, for the democratiz¬ 
ing of a bureaucratic German Empire—this war was 
fought not only in Flanders and Picardy and the Vosges, 
but in Africa and Asia and the South Seas; not only in 
Poland and Galicia and East Prussia, but in Mesopotamia 
and Syria and the Dardanelles. Anatolia, Palestine, and 
the region of the Persian Gulf were as much the stakes 
of the war as Italia irredenta, the lost provinces of 
France, or the Serbian “outlet” to the Adriatic. 

Of all the spoils of the war, Turkey was among the 
richest. Her undeveloped wealth in minerals and fuel; 
her potentialities as a producer of foodstuffs, cotton, and 
other agricultural products; her possibilities as a market 
—these were alluring as war-time necessities and peace¬ 
time assets. Her strategic position was of inestimable 
importance to any nation which hoped to establish colonial 
power in the eastern Mediterranean. Her future as a 
sphere of influence promised unusual opportunities for 
the investment of capital and the acquisition of exclusive 
economic rights. It was no accident, therefore, that 
brought men from Berlin and Bombay, Stuttgart and 
Sydney, Munich and Marseilles, to fight bitterly for pos¬ 
session of the cliffs of Gallipoli, the deserts of Meso¬ 
potamia, and the coast of Syria. Turkey-in-Asia was a 
rich prize upon which imperialists in Berlin and Vienna, 
London and Paris and Petrograd, had set their hearts. 

No sooner had Turkey entered the war than the im¬ 
perial aspects of the struggle became apparent. Germany 
was deluged with literature designed to show that Otto¬ 
man participation in the war would assure Germany and 
Austria their legitimate “place in the sun.” Business 
men and diplomatists, missionaries and Oriental scholars 6 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 281 

combined in prophesying that the Turco-German brother- 
hood-in-arms would fortify the Teutonic economic posi¬ 
tion in the Near East, disturb Russian equanimity in the 
Caucasus, menace Britain’s communications with India, 
and end once and for all French pretensions in Syria. 
Moslem sympathizers predicted that the Holy War would 
shake the Entente empires to their foundations. Pan- 
Germans frankly avowed that the war offered an oppor¬ 
tunity to make Berlin-to-Bagdad a reality rather than a 
dream—some went so far as to believe that German domi¬ 
nation could be ’extended from the North Cape to the 
Persian Gulf! Mercantilists foresaw the possibility of 
creating a politically unified and an economically self- 
sufficient Middle Europe. 7 

As a means of promoting closer relationships with 
Turkey numerous societies were established in Germany 
for the purpose of disseminating information on the Near 
East and its importance in the war. For example, Dr. 
Hugo Grothe conducted at Leipzig the work of the 
Deutsches Vorderasienkomitee—V ereinigung zur Fdr- 
derung deutscher Kulturarbeit im islamischen Orient. 
This organization published and distributed hundreds of 
thousands of books, pamphlets, and maps regarding 
Asiatic Turkey; conducted a Near East Institute, at 
which lectures and courses of instruction were given; 
maintained an information bureau for business men in¬ 
terested in commercial and industrial opportunities in the 
Ottoman Empire; and established German libraries in 
Constantinople, Aleppo, Bagdad, Konia, and elsewhere 
along the line of the Bagdad Railway. A similar organ¬ 
ization, the Deutsch-tjirkische Vereinigung, was main¬ 
tained at Berlin under the honorary presidency of Dr. 
von Gwinner of the Deutsche Bank and the active super¬ 
vision of Dr. Ernest Jackh. The two societies numbered 
among their members and patrons Herr Ballin, of the 


282 


THE BAGDAD RAILWAY 


Plamburg-American Line, General von der Goltz, Baron 
von Wangenheim, and the Ottoman ambassador at 
Berlin. 8 

The watchdogs of British imperial welfare, however, 
were not asleep. Lord Crewe, the Secretary of State for 
India, was busily engaged in plans for safeguarding 
British economic and strategic interests in Mesopotamia. 
Early in September, 1914, General Sir Edmund Barrow, 
Military Secretary of the India Office, prepared a memo¬ 
randum, “The Role of India in a Turkish War/’ which 
proposed the immediate occupation of Basra on the 
grounds that it was “the psychological moment to take 
action” and that “so unexpected a stroke at this moment 
would have a startling effect” in checkmating Turkish 
intrigues, encouraging the Arabs to revolt and thus fore¬ 
stalling an Ottoman attack on the Suez, and in protecting 
the oil installations at the head of the Persian Gulf. 9 
Supporters of a pro-Balkan policy, in the meantime, were 
urging an attack on Turkey from the Mediterranean. 
Winston Churchill, Chief Lord of the Admiralty, for 
example, in a memorandum of August 19, 1914, to Sir 
Edward Grey, advocated an alliance with Greece against 
Turkey; by September 4 he had completed plans for a 
military and naval attack on the Dardanelles; on Septem¬ 
ber 21 he telegraphed Admiral Carden, at Malta, to “sink 
the Goeben and Breslau, no matter what flag they fly, if 
they come out of the Straits.” Mr. Churchill, with whose 
name will ever be associated the disastrous expedition to 
the Dardanelles, believed that, whatever the outcome of 
the war on the Western Front, the success or failure of 
Germany would be measured in terms of her power in 
the Near East after the termination of hostilities. To 
destroy German economic and political domination of 
Turkey it was necessary to have an expedition at the head 
of the Persian Gulf and, possibly, another in Syria, but 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 283 

the commanding strategic position was the Straits. The 
capture of Constantinople would win the war. 10 

There were others who considered thafa purely defen¬ 
sive policy should be followed in the Near East. Lord 
Kitchener, for example, 'believed in concentrating the 
maximum possible man power in France and advocated 
restricting Eastern operations to the protection of the 
Suez Canal and other essential communications. Influ¬ 
ential military critics, like Colonel Repington, were firmly 
opposed to “side shows” in Mesopotamia, at the Darda¬ 
nelles, or elsewhere, which would divert men, materiel, 
and popular attention from the Western Front. Sir 
Edward *Grey appeared to be more interested in Conti¬ 
nental than in colonial questions. Lord Curzon was 
swayed between fear of a Moslem uprising in India and 
the hope that British prestige in the East might be 
materially enhanced by outstanding military successes at 
the expense of the Turks. 11 

The Near Eastern imperialists, however, had their way. 
During September, 1914, the Government of India was 
ordered to prepare an expeditionary force for service in 
the region of the Persian Gulf. Early in October, almost 
four weeks before Turkey entered the war, Indian Ex¬ 
peditionary Force “D,” under General Delamain, sailed 
from Bombay under sealed orders. It next appeared on 
October 23, at Bahrein Island, in the Persian Gulf, where 
General Delamain learned the purposes of the expedition 
which he commanded. His army was to occupy Adaban 
Island, at the mouth of the Shatt-el-Arab, “with the object 
of protecting the oil refineries, tanks and pipe lines [of 
the Anglo-Persian Company], covering the landing of 
reenforcements should these be required, and assuring 
the local Arabs of support against Turkey.” For the 
last-named purpose Sir Percy Cox, subsequently British 
High Commissioner in Irak, was attached to the army as 


284 


THE BAGDAD RAILWAY 


“political officer.” In addition, General Delamain was to 
“take such military and political action as he should con¬ 
sider feasible to strengthen his position and, if necessary, 
occupy Basra.” Nevertheless, he was warned that the 
role of his force was “that of demonstrating at the head 
of the Persian Gulf” and that on no account was he “to 
take any hostile action against the Turks without orders 
from the Government of India, except in the case of 
absolute military necessity ’! 12 

Meanwhile, Sir Arthur Henry McMahon, subsequently 
first High Commissioner in Egypt under the Protectorate, 
entered into an agreement, dated October 23, 1914, with 
the Sherif of Mecca, assuring the latter that Great Britain 
was prepared “to recognize and support the independence 
of the Arabs within territories in which Great Britain is 
free to act without detriment to the interests of her ally, 
France,” it being understood that “the districts of Mer- 
sina and Alexandretta and portions of Syria lying to the 
west of the districts of Damascus, Homs, Hama and 
Aleppo cannot be said to be purely Arab.” In other 
words, an independent Arab state was considered to be 
feasible insofar as it did not conflict with the sphere of 
interest in Syria developed by French railway-builders 
and recognized by the Franco-German agreement of 
February 15, 1914. 13 

Even before Turkey formally entered the war, there¬ 
fore, a British army was “demonstrating” in the Shatt- 
el-Arab; Sir Percy Cox was cooperating with the Sheik 
of Koweit for the purpose of precipitating a rebellion 
among the Arabs of Mesopotamia, and a British repre¬ 
sentative had sown the seeds of a separatist movement 
in the Hedjaz. It was a short step from this, after the 
declaration of hostilities, to the occupation of Basra, on 
November 22, and of Kurna, on December 9. The close 
of the year 1914 saw Turkey in the unenviable position 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 285 

of having to choose between increasing German economic 
and political domination, on the one hand, and dismember¬ 
ment by the Entente Allies, on the other. 

The political and military situation of Turkey did not 
improve during the year 1915. By mid-January, the 
rigors of a Caucasian winter and the absence of adequate 
means of communication and supply brought to a stand¬ 
still Enver Pasha’s drive against the Russians. Early in 
February, Djemal Pasha’s army, which had crossed the 
Sinai Peninsula in the face of seemingly insuperable ob¬ 
stacles, attacked the Suez Canal only to be decisively 
defeated by its British and French defenders. During 
March a secret agreement was reached between Great 
Britain, France, and Russia for the partition of the Otto¬ 
man Empire, including the assignment of Constantinople 
to the Tsar. On April 26, by the Treaty of London 
which brought Italy into the war, the Entente Powers 
bound themselves to “preserve the political balance in the 
Mediterranean” by recognizing the right of Italy “to 
receive on the division of Turkey an equal share with 
Great Britain, France and Russia in the basin of the 
Mediterranean, and more specifically in that part of it 
contiguous to the province of Adalia, where Italy already 
had obtained special rights and developed certain in¬ 
terests” ; likewise the Allies agreed to protect the interests 
of Italy “in the event that the territorial inviolability of 
Asiatic Turkey should be sustained by the Powers” or 
that “only a redistribution of spheres of interest should 
take place.” 14 To give greater effect to these secret 
imperialistic agreements British troops were landed at the 
Dardanelles on April 28. The bargains were sealed with 
the blood of those heroic Britons and immortal Anzacs 
who went through the tortures of hell—and worse—at 
Gallipoli! 15 

In the meantime, British activities were resumed in 


286 


THE BAGDAD RAILWAY 


Mesopotamia. In March, 1915, General J. E. Nixon was 
ordered to Basra with renewed instructions “to secure the 
safety of the oilfields, pipe line and refineries of the 
Anglo-Persian Oil Company,” as well as with orders to 
consolidate his position for the purpose of “retaining 
complete control of lower Mesopotamia” and of making 
possible a subsequent advance on Bagdad. On May 29, 
in accordance with these instructions, the Sixth Division, 
under General Sir Charles Townshend, occupied Amara, 
a town of 12,000 lying about fifty miles north of Basra 
on the Tigris, seat of the Turkish provincial administra¬ 
tion and one of the principal entrepots of Mesopotamian 
trade. Beyond this point General Nixon refused to 
extend his operations unless assured adequate reenforce¬ 
ments, which were not forthcoming. Nevertheless, be¬ 
cause of the insistence of Sir Percy Cox that some out¬ 
standing success was necessary to retain support of the 
Arabs, another advance was ordered in the early autumn. 
On September 29, General Townshend occupied Kut-el- 
Amara, 180 miles north of his former position. 

Then followed the decision to advance on Bagdad—a 
move which will go down in history as one of the chief 
blunders of the war, as well as a conspicuous instance 
of the manner in which political desiderata were allowed 
to outweigh military considerations. The soldiers on 
the ground were opposed to the move. General Nixon 
believed it would be disastrous to advance farther than 
Kut without substantial reenforcements. General Town¬ 
shend was convinced that “Mesopotamia was a secondary 
theatre of war, and on principle should be held on the 
defensive with a minimum force,” and he warned his 
superiors that his troops “were tired, and their tails were 
not up, but slightly down,” that they were fearful of 
the distance from the sea and “were going down, in 
consequence, with every imaginable disease.” But the 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 287 

statesmen at London were thinking not only of winning 
the war but of eliminating Germany from all future 
political and economic competition in the backward areas 
of the world. “Because of the great political and mili¬ 
tary advantages to be derived from the capture of Bag¬ 
dad/’ and because the “uncertainty” of the situation at 
the Dardanelles made apparent “the great need of a 
striking success in the East,” Austen Chamberlain, Secre¬ 
tary of State for India, telegraphed the Viceroy on 
October 23, 1915, that an immediate advance should be 
begun. Fearful of the consequences, but faithful to his 
trust, General Townshend began the hundred-mile march 
to Bagdad. Worn out, but heroic beyond words, his 
troops drove the Turkish forces back and, on November 
22, occupied Ctesiphon, only eighteen miles from their 
goal. This, however, marked the high tide of Allied 
success in the Near East during 1915, for General Towns¬ 
hend was destined to reach Bagdad only as a prisoner 
of war. 16 

Germany Wins Temporary Domination of the Near 

East 

Allied military successes in Tufkey were not looked 
upon with equanimity in Germany. There was a realiza¬ 
tion in Berlin, as well as London and Paris and Petrograd, 
that the stakes of the war were as much imperial as 
Continental. Nothing had as yet occurred which had 
lessened the importance of establishing an economically 
self-sufficient Middle European bloc of nations. In the 
event that the German oversea colonies could not be 
recovered, Asiatic Turkey—because of its favorable geo¬ 
graphical position, its natural resources, and its poten¬ 
tialities as a market—would be almost indispensable in 
the German imperial scheme of things. As Paul Rohr- 
bach wrote in Das grossere Deutschland in August, 1915, 


288 


THE BAGDAD RAILWAY 


“After a year of war almost everybody in Germany is of 
the opinion that victory or defeat—at least political vic¬ 
tory or defeat—depends upon the preservation of Turkey 
and the maintenance of our communications with her.” 

The dogged defence of the Dardanelles had convinced 
Germany that, granted proper support, Turkey could be 
depended upon to give a good account of herself. The 
problem was one of supplementing Ottoman man power 
with Teutonic military genius, technical skill, and organ¬ 
izing ability. The enlistment of Bulgaria and the oblitera¬ 
tion of Serbia made possible more active German assist¬ 
ance to Turkey, and during the latter months of 1915 
and the early months of 1916 strenuous efforts were made 
to bring the Turkish military machine to a high point of 
efficiency. Large numbers of German staff officers were 
despatched to Mesopotamia, Syria, and Anatolia, and 
Turkish officers were brought to the French and Russian 
fronts to learn the methods of modern warfare. The 
Prussian system of military service was adopted through¬ 
out the Ottoman Empire, and exemptions were reduced 
to a minimum. Liberal credits were established with 
German banks for the purchase of supplies for the new 
levies of troops. Field Marshal von der Goltz was sent 
to Mesopotamia as commander-in-chief of the Turkish 
troops in that region. 17 

Perhaps the chief handicap of the Turks in all their 
campaigns was inadequate means of transportation. The 
Ottoman armies operating in the vicinity of Gaza and of 
Bagdad were dependent upon lines of communication 
more than twelve hundred miles long; and had the Bag¬ 
dad Railway been non-existent, it is doubtful if any mili¬ 
tary operations at all could have been conducted in those 
regions. But the Bagdad Railway was uncompleted. 
Troops and supplies being despatched from or to Ana¬ 
tolia had to be transported across the Taurus and Amanus 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 289 

mountains by mule-back, wagon, or automobile, and then 
reloaded on cars south or north of the unfinished tunnels. 
To remedy these deficiencies, herculean efforts were made 
by Germans and Turks during 1915 to improve the serv¬ 
ice on existing lines and to hurry the completion of the 
Bagdad Railway. Locomotives and other rolling stock 
were shipped to Turkey, and German railway experts 
cooperated with the military authorities in utilizing trans¬ 
portation facilities to the best advantage. In September, 
Bagtche tunnel was pierced; and although 
through service to Aleppo was not inaugurated until 
October, 1918, a temporary narrow-gauge line was used, 
during the interim, to transport troops and materiel 
through the tunnel. Commenting on the importance of 
the Bagtche tunnel, the American Consul General at Con¬ 
stantinople wrote: “With its completion the most serious 
difficulties connected with the construction of the Bagdad 
Railway have been overcome, and the work of connecting 
up many of the isolated stretches of track may be ex¬ 
pected to be completed with reasonable rapidity. In spite 
of delays occasioned by the war, this most important 
undertaking in railway construction in Turkey has passed 
the problematical stage and is now certain to become an 
accomplished fact in the near future.” 18 

The effects of German assistance to Turkey soon made 
themselves apparent. Field Marshal von der Goltz, com¬ 
manding a reenforced and reinvigorated Ottoman army, 
supported by German artillery, compelled General Towns- 
hend to abandon hope of occupying Bagdad and to fall 
back toward Basra. By December 5, 1915, Townshend’s 
army was besieged in Kut-el-Amara; and although the 
Turks failed to take the town by storm, they did not fail 
to 'beat off every Russian and British force sent to the 
relief of the beleaguered troops. About the same time, 
December 10, evacuation of the Dardanelles was begun, 



290 


THE BAGDAD RAILWAY 


and the last of the British troops were withdrawn during 
the first week of January, 1916. On April 29, Towns- 
hend’s famished garrison surrendered. Shortly there¬ 
after the offensive of the Grand Duke Nicholas in 
Turkish Armenia was brought to a standstill. During 
July and August a second Ottoman attack was launched 
against the Suez Canal; and although it was unsuccessful, 
the expedition reminded the British that Egypt was by no 
means immune from danger. By the end of the year 
1916 Turkey, with German assistance, had completely 
cleared her soil of enemy troops, except for a retreating 
Russian army in northern Anatolia and a defeated British 
expedition at the head of the Persian Gulf. 19 

As for Germany, she “was unopposed in her mastery 
of that whole vast region of southeastern Europe and 
southwestern Asia which goes by the name of the Near 
East. . . . She now enjoyed uninterrupted and unmen¬ 
aced communication and commerce with Constantinople 
not only, but far away, over the great arteries of Asiatic 
Turkey [the Bagdad and Hedjaz railways], with Damas¬ 
cus, Jerusalem, and Mecca, and with Bagdad likewise. 

. . . If military exploits had been as conclusive as they 
had been spectacular, Germany would have won the Great 
War in 1916 and imposed a Pax Germanica upon the 
world. . . . With the adherence of Turkey and Bulgaria 
to the Teutonic Alliance, and the triumphs of those states, 
a Germanized Mittel-Europa could be said to stretch from 
the North Sea to the Persian Gulf, from the Baltic to 
the Red Sea, from Lithuania and Ukrainia to Picardy and 
Champagne. It was the greatest achievement in empire¬ 
building on the continent of Europe since the days of 
Napoleon Bonaparte.” 20 

If Germany had been alarmed during the summer of 
1915 at the prospect that she might lose her preponderant 
position in Turkey, the world was now alarmed at the 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 291 

prospect that she might maintain that position. Nor was 
that alarm easily dispelled, for the Bagdad Railway and 
the power and prestige it gave Germany in the Near East 
were pointed to by statesmen as additional evidence of 
the manner in which the Kaiser and his cohorts had 
plotted in secret against the peace of an unsuspecting and 
unprepared world. In fact, the Bagdad Railway came 
to be considered one of the fundamental causes of the 
war, as well as one of the chief prizes for which the war 
was being fought. President Wilson, for example, in 
his Flag Day speech, June 14, 1917, stated the case in 
the following terms : 21 

“The rulers of Germany . . . were glad to go forward un¬ 
molested, filling the thrones of Balkan states with German princes, 
putting German officers at the service of Turkey to drill her 
armies and make interest with her government, developing plans 
of sedition and rebellion in India and Egypt, setting their fires in 
Persia. The demands made by Austria upon Serbia were a mere 
single step in a plan which compassed Europe and Asia, from 
Berlin to Bagdad. . . . 

“The plan was to throw a broad belt of German military power 
and political control across the very centre of Europe and beyond 
the Mediterranean into the heart of Asia; and Austria-Hungary 
was to be as much their tool and pawn as Serbia or Bulgaria or 
Turkey or the ponderous states of the East. . . . The dream had 
its heart at Berlin. It could have had a heart nowhere else! . . . 

“And they have actually carried the greater part of that amazing 
plan into execution. . . . The so-called Central Powers are in fact 
but a single Power. Serbia is at its mercy, should its hands be 
but for a moment freed. Bulgaria has consented to its will, and 
Roumania is overrun. The Turkish armies, which Germans 
trained, are serving Germany, certainly not themselves, and the 
guns of German warships lying in the harbor at Constantinople 
remind Turkish statesmen every day that they have no choice but 
to take their orders from Berlin. From Hamburg to the Persian 
Gulf the net is spread!” 

As late as November 12, 1917, after some spectacular 
victories by the Allies in Mesopotamia and Syria, Presi- 


292 


THE BAGDAD RAILWAY 


dent Wilson made it plain that no peace was possible 
which did not destroy German military power in the Near 
East. Addressing the American Federation of Labor, 
at Buffalo, N. Y., he said: 22 

“Look at the map of Europe now. Germany, in thrusting upon 
us again and again the discussion of peace, talks about what? 
Talks about Belgium—talks about Alsace-Lorraine. Well, these 
are deeply interesting subjects to us and to them, but they are 
not talking about the heart of the matter. Take the map and 
look at it. Germany has absolute control of Austria-Hungary, 
practical control of the Balkan States, control of Turkey, control 
of Asia Minor. I saw a map the other day in which the whole 
thing was printed in appropriate black, and the black stretched 
all the way from Hamburg to Bagdad—the bulk of the German 
power inserted into the heart of the world. If she can keep that, 
she has kept all that her dreams contemplated when the war 
began. If she can keep that, her power can disturb the world 
as long as she keeps it, always provided . . . the present influ¬ 
ences that control the German Government continue to control it.” 

In the light of all the facts, this diagnosis of the situa¬ 
tion is incomplete, to say the least. Had President Wilson 
been cognizant of the contemporaneous counter-activities 
of the Allied Powers, he might not have been prepared 
to offer so simple an explanation of a many-sided prob¬ 
lem. For it was not German imperialism alone which 
menaced the peace of the Near East and of the world, 
but all imperialism. 

“Berlin to Bagdad” Becomes But a Memory 

Germany may have been determined to dominate the 
Ottoman Empire by military force. But from the Turk¬ 
ish point of view domination by Germany was hardly 
more objectionable than the dismemberment which was 
certain to be the result of an Allied victory. 

Indeed, confident that they would eventually win the 
war, the Entente Powers had proceeded far in their plans 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 293 

for the division of the Ottoman Empire. During the 
spring of 1915, as has been indicated, 23 Russia had been 
promised Constantinople, and Italy had been assigned a 
share of the spoils equal to that of Great Britain, France, 
or Russia. To give full effect to these understandings, 
further negotiations were conducted during the autumn 
of 1915 and the spring of 1916, looking toward a more 
specific delimitation of interests. 

Accordingly, on April 26, 1916—the first anniversary 
of the Treaty of London with Italy—France and Russia 
signed the secret Sazonov-Paleologue Treaty concerning 
their respective territorial rights in Asiatic Turkey. 
Russia was awarded full sovereignty over the vilayets 
of Trebizond, Erzerum, Bitlis, and Van—a vast area of 
60,000 square miles (about one and one-fifth times the 
size of the State of New York), containing valuable 
mineral and petroleum resources. This handsome prize 
put Russia well on the road to Constantinople and in a 
fair way to turn the Black Sea into a Russian lake. And 
at the moment the treaty was signed the armies of the 
Grand Duke Nicholas were actually overrunning the ter¬ 
ritory which Russia had staked out for herself! For her 
part, France was to receive adequate compensations in 
the region to the south and southwest of the Russian 
acquisitions, the actual delimitation of boundaries and 
other details to be the result of direct negotiation with 
Great Britain. 24 

Thus came into existence the famous Sykes-Picot 
Treaty of May 9, 1916, defining British and French po¬ 
litical and economic interests in the hoped-for dismember¬ 
ment of the Ottoman Empire. The Syrian coast from 
Tyre to Alexandretta, the province of Cilicia, and south¬ 
ern Armenia (from Sivas on the north and west to 
Diarbekr on the south and east) were allocated to France 
in full sovereignty. In addition, a French “zone of in- 


294 


THE BAGDAD RAILWAY 


fluence” was established over a vast area including the 
provinces of Aleppo, Damascus, Deir, and Mosul. Ad¬ 
ministration of this stretch of coast and its hinterland 
would give French imperialists what they most wanted in 
the Near East—actual possession of a country in which 
France had many religious and cultural interests, control 
of the silk production of Syria and the potential cotton 
production of Cilicia, ownership of the Arghana copper 
mines, and acquisition of that portion of the Bagdad 
Railway lying between Mosul and the Cilician Gates of the 
Taurus. 25 Aside from its satisfaction of French im¬ 
perial ambitions, however, “the French area defied every 
known law of geographic, ethnographic, and linguistic 
unity which one might cite who would attempt to justify 
it.” 26 

Great Britain, by way of “compensation,” was to re¬ 
ceive complete control over lower Mesopotamia from 
Tekrit to the Persian Gulf and from the Arabian bound¬ 
ary to the Persian frontier. In addition, she was recog¬ 
nized as having special political and economic interests— 
particularly the right “to furnish such advisers as the 
Arabs might desire”—in a vast territory lying south of 
the French “zone of influence” and extending from the 
Sinai Peninsula to the Persian border. Palestine was 
to be internationalized, but was subsequently established 
as a homeland for the Jews. In this manner Britain, 
also, had adequately protected her imperial interests— 
she^ had secured possession of the Bagdad Railway in 
southern Mesopotamia; she had gained complete control 
of the head of the Persian Gulf, thus fortifying her 
strategic position in the Indian Ocean; she was assured 
the Mesopotamian cotton supply for the mills of Man¬ 
chester and the Mesopotamian oil supply for the dread¬ 
noughts of the Grand Fleet; she had erected in Palestine 
a buffer state which would block any future Ottoman 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 295 


attacks on the Suez Canal. All in all, Sir Mark Sykes 
had driven a satisfactory bargain. 27 

Italian ambitions now had to be propitiated. For a 
whole year before the United States entered the war— 
while the Allied governments were professing Unselfish 
war aims—secret negotiations were being conducted by 
representatives of France, Great Britain and Italy to de¬ 
termine what advantages and territories, equivalent to 
those gained by the other Allies, might be awarded Italy. 
Iq^April, 1917, by the so-called St. Jean de Maurienne 
Agreement, Italy was granted complete possession of 
almost the entire southern half of Anatolia—including 
the important cities of Adalia, Konia, and Smyrna— 
together with an extensive “zone of influence’’ northeast 
of Smyrna. With such a hold on the coast of Asia 
Minor, Italian imperialists might realize their dream of 
dominating the trade of the Higean and of reestablishing 
the ancient power of Venice in the commerce of the 
Near East. 28 

These inter-Allied agreements for the disposal of 
Asiatic Turkey were instructive instances of the “old 
diplomacy” in cooperation with the “new imperialism.” 
The treaties were secret covenants, secretly arrived at; 
they bartered territories and peoples in the most approved 
manner of Metternich and Richelieu. But they were less 
concerned with narrowly political claims than with the 
exclusive economic privileges which sovereignty carried 
with it; they determined boundaries with recognition of 
their strategic importance, but with greater regard for 
the location of oilfield's, mineral deposits, railways and 
ports of commercial importance. They left no doubt as 
to what were the real stakes of the war in the Near East. 

It is difficult, if cot impossible, to reconcile the secret 
treaties with the pronouncements of Allied statesmen 
regarding the origins and purposes of the Great War. 


296 


THE BAGDAD RAILWAY 


Certainly they were no part of the American program 
for peace, which promised to “the Turkish portions of 
the Ottoman Empire a secure sovereignty”; which de¬ 
manded “a free, open-minded, and absolutely impartial 
adjustment of all colonial claims, based upon a strict 
observance of the principle that in determining all such 
questions of sovereignty the interests of the populations 
concerned must have equal weight with the equitable 
claims of the government whose title is to be determined” ; 
and which announced in no uncertain terms that “the day 
of conquest and aggrandizement is gone by” as is also 
“the day of secret covenants entered irjto in the interest 
of particular governments and likely at some unlooked- 
for moment to upset the peace of the world.” 29 

Allied diplomacy was to have its way in the Near East, 
however, for the goddess of victory finally smiled upon 
the Allied armies and frowned upon both Turks and 
Germans. As 1916 had been a year of Turco-German 
triumphs at the Dardanelles and in Mesopotamia, 1917 
brought conspicuous Allied victories along the Tigris 
and in Syria, and 1918 saw the complete collapse of the 
Ottoman Empire. On February 24, 1917, General Sir 
Stanley Maude, in command of reenforced and rejuve¬ 
nated British forces in Mesopotamia, captured Kut-el- 
Amara, retrieving the disaster which'had befallen Town- 
shend’s army a year’before. Deprived of the services of 
Field Marshal von der Goltz, who died during the Cau¬ 
casus campaign, the Turks retired in disorder, and on 
March 11 British troops entered Bagdad—the ancient 
city which had bulked so large in the German scheme of 
things in the Near’East. Although the capture of Bag¬ 
dad was not in itself of great strategic importance, its 
effect on morale in the belligerent countries was consid¬ 
erable. British imperialists were in possession of the 
ancient capital of the Arabian Caliphs, as well as the chief 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 297 

entrepot of caravan trade in the Middle East; therefore 
their prestige with both Arabs and Turks was certain to 
rise. At home, pictures of British troops in the Bag¬ 
dad of the Arabian Nights appealed to the imagination of 
the war-weary, as well as the optimistic, patriot. In the 
Central Powers, on the other hand, the loss of Bagdad 
created scepticism as to whether the German dream of 
‘‘Hamburg to the Persian Gulf” was not now beyond 
realization. This scepticism became more confirmed 
when, on April 24, General Maude captured Samarra, 
northern railhead of the uncompleted Bagdad line in 
Mesopotamia. 30 

Scepticism would have turned to alarm, however, had 
Germans been fully aware of the significance of the Brit¬ 
ish advance in the Land of the Two Rivers. For be¬ 
hind the armies of General Maude came civil officials 
by the hundreds to consolidate the victory and to lay the 
foundations of permanent occupation. An Irrigation 
Department was established to deal with the menace of 
floods, to drain marshes, and to economize in the use 
of water. An Agricultural Department undertook the 
cultivation of irrigated lands and conducted elaborate 
experiments in the growing of cotton—the commodity 
which means so much in the British imperial system. A 
railway was constructed from Basra to Bagdad which, 
when opened to commerce in 1919, became an integral part 
of the Constantinople-Basra system. There was every in¬ 
dication that the British were in Mesopotamia to stay. 31 

Germans and Turks were sufficiently aroused, however, 
to take strenuous measures to counteract General Maude’s 
successes. In April, 1917, Field Marshal von Macken- 
sen, hero of the Balkan and Rumanian campaigns and 
strong man of the Near East, was sent to Constantinople 
to confer with Enver Pasha regarding the military situ¬ 
ation. It was decided, apparently, that Bagdad must be 


298 


THE BAGDAD RAILWAY 


retaken at all costs, for throughout the summer quantities 
of rolling stock for the Bagdad Railway were shipped to 
Turkey, enormous supplies of munitions were accumu¬ 
lated at Haidar Pasha, and a division of picked German 
troops (including machine-gun and artillery units) made 
its appearance in Anatolia. Command of all the Turkish 
armies in Mesopotamia was conferred upon General von 
Falkenhayn, former German Chief of Staff. Germany 
was not yet prepared to surrender her sphere of interest 
in Turkey. 

The great expedition against Bagdad, however, had to 
be abandoned. In the first place, Turkish officers were 
loath to serve under von Falkenhayn. Turkish nation-' 
alism was beginning to assert itself, and German super¬ 
vision of Ottoman military affairs was resented—Musta- 
pha Kemal Pasha, for example, refused to accept orders 
from German generals and resigned his commission. 
Von Falkenhayn himself was disliked because of his 
dictatorial methods and was held in light esteem because 
of his responsibility for the disastrous Verdun offensive. 
Furthermore, many Turks deemed it inadvisable to dis¬ 
sipate energy in a Mesopotamian campaign, the avowed 
purpose of which was a recovery of German prestige, 
when all available man power was required for the de¬ 
fence of Syria. Djemal Pasha was so insistent on this 
point that he received from the Kaiser an “invitation” to 
visit the Western Front! In the second place, Provi¬ 
dence or, perhaps, an Allied spy intervened to thwart 
the German plans, for a great fire and a series of explo¬ 
sions (September 23-26, 1917) destroyed the entire port 
and terminal of Haidar Pasha, together with all the mu¬ 
nitions and supplies which had been accumulated there 
by months of patient effort. And finally, the spectacular 
campaign of Field Marshal Allenby in Palestine, which 
opened with the capture of Beersheba, on October 31, 


299 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 

convinced even von Falkenhayn that an expedition in 
Mesopotamia, while Aleppo was in danger, would be the 
height of folly. German energies were thereupon diverted 
to the defence of the Holy Land. 32 

During the autumn of 1917, Great Britain and France, 
to assure their possession of the territories assigned them 
by the Sykes-Picot Treaty, began a Syrian campaign 
which was not to terminate until Turkey had been put 
out of the war. Under Field Marshal Sir E. H. H. 
Allenby, British troops, reenforced by French units and 
assisted by the rebellious Arabs of the Hedjaz, captured 
Gaza (November 7), Jaffa (November 16), and Jerusa¬ 
lem (December 9). The triumphal entry of General 
Allenby into Jerusalem was hailed throughout Christen¬ 
dom as marking the success of a modern crusade to rid 
Palestine of Ottoman domination forever. Jericho was 
occupied, February 21, 1918, but Turkish resistance, 
under Marshal Liman von Sanders, stiffened for a time, 
and it was not until the autumn that large-scale opera¬ 
tions were resumed. On October 1, Damascus was oc¬ 
cupied by a combined Arab and British army; a week 
later Beirut was taken; and on October 25, Aleppo, the 
most important junction point on the Bagdad Railway, 
capitulated. Five days afterward, Turkey gave up the 
hopeless fight by signing the Mudros armistice, termin¬ 
ating hostilities. 33 

Thus ended a Great Adventure for both Turkey and 
Germany. Germany lost all hope of retaining any eco¬ 
nomic or political influence in the Ottoman Empire; the 
dream of Berlin-to-Bagdad became a nightmare. Turkey 
faced dismemberment. “The Bagdad Railway had 
proved to be the backbone of Turkish utility and power 
in the War. Were it not for its existence, the Ottoman 
resistance in Mesopotamia and in Syria could have been 
discounted as a practical consideration in the War, 


3 00 


THE BAGDAD RAILWAY 


and the sending of Turkish reenforcements to the Cau¬ 
casus would have been even more materially delayed than 
was in fact the case.” 34 For Turkey, then, the war had 
come at a most inappropriate time. Had hostilities be¬ 
gun ten years later, after the completion of the Bagdad 
system, military operations in the Near East might have 
had an entirely different result. As it was, the Bag¬ 
dad Railway—and the international complications arising 
from it—proved to be the ruination of the Ottoman 
Empire. 

To the Victors Belong the Spoils 

During 1919, the Allied Governments set about pos¬ 
sessing themselves of the spoils which were theirs by vir¬ 
tue of the secret treaties and by right of conquest. In 
April, Italian troops occupied Adalia and rapidly ex¬ 
tended their lines into the interior as far as Konia. In 
November, French armies replaced the British forces 
in Syria and Cilicia. Great Britain began the “pacifica¬ 
tion” of the tribesmen of Mesopotamia and Kurdistan. 
And in the meantime there was plentiful evidence that 
German rights in the Near East would be speedily liqui¬ 
dated in the interest of the victorious Powers. For ex¬ 
ample, on March 26, the Interallied Commission on Ports, 
Waterways, and Railways announced at Paris the adop¬ 
tion of “a new transportation agreement designed to 
secure a route to the Orient by railway without passing 
through the territories of the Central Empires.” Ac¬ 
cordingly, a fast train, the “Simplon-Orient Express,” 
was to be run regularly from Calais to Constantinople 
via Paris, Lausanne, Milan, Venice, Trieste, Agram, and 
Vinkovce. Later this service was to be extended into 
Asiatic Turkey, over the lines of the Anatolian, Bagdad, 
and Syrian railways. To meet a changed situation one 
must provide new paths of imperial expansion, and the 



TURKEY, CRUSHED TO EARTH, RISES AGAIN 301 

French press spoke glowingly of the prospect that the 
slogans “Hamburg to the Persian Gulf” and “Berlin to 
Bagdad” would be speedily replaced by “Calais to Cairo” 
and “Bordeaux to Bagdad” ! 35 

All German rights in the'Bagdad Railway and other 
economic enterprises in the Near East were abrogated by 
the Treaty of Versailles, signed June 28, 1919. The Ger¬ 
man Government was obligated to obtain and to turn 
over to the Reparation Commission “any rights and in¬ 
terests of German nationals in any public utility under¬ 
taking or in any concession operating in . . . Turkey, 
Austria, Hungary, and Bulgaria” and agreed, as well, 
“to recognize and accept all arrangements which the 
Allied and Associated Powers may make with Turkey 
and Bulgaria with reference to any rights, interests and 
privileges whatever which might be claimed by Germany 
or her nationals in Turkey and Bulgaria.” 36 

The Treaty of Sevres, August 10, 1920—together with 
the accompanying secret Tripartite Agreement of the same 
date between Great Britain, France, and Italy—carried 
still further the liquidation of German interests in the 
Near East. The Turkish Government was required to 
dispose of all property rights in Turkey of Germany, 
Austria, Hungary, Bulgaria, or their respective nationals 
and to turn over the proceeds of all purchases'and sales to 
the Reparation Commission established under the treaties 
of peace with those Powers. ‘The Anatolian and Bagdad 
Railways were to be expropriated by Turkey and all 
of their rights, privileges, and properties to be assigned— 
at a valuation to be determined by an arbitrator appointed 
by the Council of the League of Nations—to a Franco- 
British-Italian corporation to be designated by the repre¬ 
sentatives of the Allied Powers. German stockholders 
were to be compensated for their holdings, but the 
amount of their compensation was to be turned over to 


302 


THE BAGDAD RAILWAY 


the Reparation Commission; compensation due the 
Turkish Government was to be assigned to the Allied 
Governments toward the costs of maintaining their armies 
of occupation on Turkish soil. German and Turkish 
property in ceded territories of the Ottoman Empire was 
to be similarly liquidated. The Treaty of Versailles and 
the Treaty of Sevres left hardly a vestige of German influ¬ 
ence in the Near East. 37 

The Sevres settlement, furthermore, destroyed the 
Ottoman Empire and sought to give the Allies a strangle¬ 
hold upon the economic life of Turkey. Great Britain 
and France received essentially the same territorial priv¬ 
ileges as they had laid out for themselves in the Sykes- 
Picot Treaty, with the vague restrictions that they should 
exercise in Mesopotamia and Palestine and in Syria and 
Cilicia respectively only the rights of mandatory powers. 
Great Britain was confirmed in her oil and navigation 
concessions in Mesopotamia, France in her railway rights 
in Syria; in addition, the Hedjaz Railway was turned 
over outright to their joint ownership and administration. 
Italy received only a “sphere of influence” in southern 
Anatolia, including the port of Adalia, but, as a conse¬ 
quence of one of the most sordid of the transactions of 
the Paris Conference, she was deprived of the bulk of 
the privileges guaranteed her under the Treaty of London 
and the St. Jean de Maurienne Agreement. 38 Greece 
was installed in Smyrna—the most important harbor in 
Asia Minor, a harbor the control of which was vital to 
the peasantry of Anatolia for the free export of their 
produce and for the unimpeded importation of farm ma¬ 
chinery and other wares of western industry. Constan¬ 
tinople was put under the jurisdiction of an international 
commission for control of the Straits, and the balance 
of the former Russian sphere of interest was assigned 
to the ill-fated Armenian Republic. The Hedjaz was 



TURKEY, CRUSHED TO EARTH, RISES AGAIN 303 

declared to be an independent Arab state. The Ottoman 
Empire was no more. 

Even the Turkey that remained—a portion of Ana¬ 
tolia—enjoyed sovereignty in name only. The Capitu¬ 
lations, which the Sultan had terminated in the autumn 
of 1914, were reestablished and extended. Concessions 
to Allied nationals were confirmed in all the rights which 
they enjoyed before Ottoman entry into the Great War. 
Because of the reparations, and because of the high cost 
of the Allied armies of occupation, the country was being 
loaded down with a still further burden of debt from 
which there appeared to be no escape—and debts not 
only mortgaged Turkish revenues but impaired Turkish 
administrative integrity. To assure prompt payment of 
both old and new financial obligations of the Turkish 
Government, an Interallied Financial Commission was 
superimposed upon the Ottoman Public Debt Admin¬ 
istration. The Financial Commission’had full supervision 
over taxation, customs, loans, and currency; exercised 
final control over the Turkish budget; and had the right 
to veto any proposed concession. In control of its do¬ 
mestic affairs the new Turkey was tied hand and foot. 
Here, indeed, was a Carthaginian peace! And all of 
this was done in order “to help Turkey, to develop her 
resources, and to avoid the international rivalries which 
have obstructed these objects in the past!” 39 

“The Ottoman Empire is Dead. Long Live Turkey !” 

In the meantime, however, while the Sevres Treaty 
was still in the making, there was a small handful of 
Turkish patriots who were determined at all costs to 
win that complete independence for which Turkey had 
entered the war. These Nationalists were outraged by 
the Greek occupation of Smyrna, in May, I 9 ! 9 > which 


3°4 


THE BAGDAD RAILWAY 


they considered a forecast of the kind of peace to be 
dictated to Turkey. During the summer of 1919 they 
held two conferences at Erzerum and Sivas and agreed 
to reject any treaty which handed over Turkish popula¬ 
tions to foreign domination, which would reduce Turkey 
to economic servitude to the victorious Powers, or which 
would impair the sovereignty of their country. Upon 
this program they won a sweeping victory in the parlia¬ 
mentary elections of 1919-1920. For leadership they 
depended largely upon that brilliant soldier and staunch 
Turk, Mustapha Kemal Pasha, who had distinguished 
himself by his quarrel with Liman von Sanders at the 
Dardanelles and his defiance of von Falkenhayn in 
Syria. Mustapha Kemal Pasha, who had bitterly con¬ 
tested the growth of German influence in Turkey during 
the war, was not likely to accept without a struggle the 
extension of Allied control over Turkish affairs. 40 

In Constantinople, January 28, 1920, the Nationalist 
members of the Turkish Parliament signed the celebrated 
“National Pact”—frequently referred to as a Declara¬ 
tion of Independence of the New Turkey. “The Pact 
was something more than a statement of war-aims or a 
party programme. It was the first adequate expression 
of a sentiment which had been growing up in the minds 
of Western-educated Turks for three or four generations, 
which in a half-conscious way had inspired the reforms 
of the Revolution of 1908, and which may dominate 
Turkey and influence the rest of the Middle East for 
many generations to come. It was an emphatic adoption 
of the Western national idea.” 41 It was based upon 
principles which had received wide acceptance among 
peoples of the Allied nations during the war: self-de¬ 
termination of peoples, to be expressed by plebiscite; 
protection of the rights of minorities, but no further 
limitations of national sovereignty. As regards the Capit- 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 305 

ulations and the Ottoman Public Debt Administration, 
the Pact is explicit: “With a view to assuring our national 
and economic development,” it reads, “and with the 
end of securing to the country a more regular and more 
modern administration, the signatories of the present pact 
consider the possession of complete independence and 
liberty as the sine qua non of our national existence. 
In consequence, we oppose all juridical or financial re¬ 
strictions of any nature which would arrest our national 
development.” Rather that Turkey should die free than 
live in slavery! Foreswearing any intention of recovering 
the Sultan’s former Arab possessions, the Pact proceeded 
to serve notice, however, that Cilicia, Mosul, and the 
Turkish portions of Thrace must be reunited with the 
fatherland. “The Ottoman Empire is dead! Long live 
Turkey!” 42 

With this amazing program Mustapha Kemal Pasha 
undertook to liberate Turkey. In April, 1920, the gov¬ 
ernment of the Grand National Assembly was instituted 
in Angora and proceeded to administer those portions of 
Anatolia which were not under Allied or Greek occupa¬ 
tion. The proposed Treaty of Sevres—which was handed 
to the Turkish delegates at Paris on May 11—was con¬ 
demned as inconsistent with the legitimate national as¬ 
pirations of the Turkish people. The Allies and the 
Constantinople Government were denounced—the former 
as invaders of the sacred soil of Turkey, the latter as 
tools of European imperialists. Then followed a series 
of successful military campaigns: by October, 1920, the 
French position in Cilicia had been rendered untenable, 
the Armenian Republic had been obliterated, the British 
forces of occupation had been forced back into the Ismid 
peninsula, and the Italians had withdrawn their troops 
to Adalia. In the spring of 1921 separate treaties were 
negotiated with Russia, Italy, and France, providing for 


3°6 


THE BAGDAD RAILWAY 


a cessation of military operations and for the evacua¬ 
tion of certain Turkish territories. 43 Then came the 
long, bitter struggle against the Greeks, terminating with 
the Mudania armistice of October io, 1922, which as¬ 
sured to the Turks the return of Smyrna and portions of 
Thrace. On November 1, the Sultanate was abolished, 
and Turkey became a republic. Four days later the 
Turkish Nationalists entered Constantinople in triumph. 
The struggle for the territorial and administrative in¬ 
tegrity of a New Turkey seemed to be won. 

The victory of the Nationalists scrapped the Treaty 
of Sevres and called for a complete readjustment of the 
Near Eastern situation. When the first Lausanne Con¬ 
ference for Peace in the Near East assembled on Novem¬ 
ber 20, 1922, there were high hopes that a just and last¬ 
ing settlement might be arrived at. The conference was 
only a few days old, however,. when the time-honored 
obstacles to peace in the Levant made their appearance: 
the rival diplomatic policies of the Great Powers; the 
desire of the West, by means of the Capitulations, to 
maintain a firm hold upon its vested interests in the 
East; the imperialistic struggle of rival concessionaires, 
supported by their respective governments, for possession 
of the raw materials, the markets, and the communications 
of Asiatic Turkey. Once more the Bagdad Railway, with 
its tributary lines in Anatolia and Syria, became one of 
the stakes of diplomacy! 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 C. J. H. Hayes, A Brief History of the Great War (New 
York, 1920), pp. 71-72; “A Rival to the Bagdad Line,” in The 
Near East, May 25, 1917. 

a Supra, Chapter V. 

‘Regarding the diplomatic situation at Constantinople during 
the critical months of July to November, 1914, cf. “Correspond¬ 
ence respecting events leading to the rupture of relations with 
Turkey,” Parliamentary Papers, No. Cd. 7628 (1914) ; C. 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 307 

Mehrmann, Der diplomatische Krieg in V orderasien (Dresden, 
i 9 j 6) ; J. Aulneau, La Turqnie et la Guerre (Paris, 1916) ; C. 
Strupp, Diplomatische Aktenstiicke zur orientalischen Frage 
(Berlin, 1916) ; Historicus, “Origines de 1 ’alliance turco-ger- 
manique,” in Revue, 7 series, Volume in (Paris, 1915), pp. 
267 et seq.; Ostrorog, op. cit., Chapters XII-XVI; footnote 40, 
Chapter X, supra. 

‘Quoted from Current History, Volume I (New York, 1915), 
p. 1032. 

6 Die deutsch-liirkische Waffenbriiderschaft, p. 30. 

6 Notably Dr. Ernst Jackh and Dr. Hugo Grothe. 

7 The following list of books is given without any pretence 
that it is a complete bibliography of German publications on 
the Near Eastern question during the year 1914-1915: A. Rit¬ 
ter, Berlin-Bagdad, neue Ziele mitteleuropbischer Politik (Mu¬ 
nich, 1915) and Nordkap-Bagdad, das politische Programm des 
Krieges (Frankfort a. M., 1914) ; Hugo Grothe, Die Tiirken 
und ihre gegnerkriegsgeographische Betrachtungen (Frank¬ 
furt a. M., 1915), Deutsch-turkische ivirtschaftliche Interessen- 
gemeinschaft (Munich, 1915), and Deutschland, die Tiirkei und 
der Islam (Leipzig, 1915) ; C. A. Schafer, Deutsch-turkische 
Freundschaft (Stuttgart, 1915) ; Carl H. Becker, Deutschland 
und der Islam (Leipzig, 1914) ; J. Ritter von Riba, Der tiirkische 
Bundesgenosse (Berlin, 1915) ; J. Hall, Der Islam und die 
abendldndische Kultur (Weimar, 1915) ; Ernst Marre, Die 
Tiirken und wir nach dem Kriege (Leipzig, 1916) ; Tekin Alp, 
Tiirkismus und Pantiirkismus (Weimar, 1915) ; R. Schafer, 
Der deutsche Krieg, die Tiirkei, Islam und Christentum (Leip¬ 
zig, 1915) ; W. T. Vela, Die Zukunft der Tiirkei in Bundnis 
mit Deutschland (Berlin, 1915) ; W. Blanckenburg, Die Zu- 
kunftsarbeit der deutschen Schule in der Tiirkei (Berlin, I 9 I 5 ) » 
H. Schmidt, Das Eisenbahnwesen in der asiatischen Tiirkei 
(Berlin, 1914) ; H. Margulies, Der Kampf zwischen Bagdad 
und Suez in Altertums (Weimar, 1915) ; M. Horten, Die islam- 
ische Geisteskultur (Leipzig, 1915) ; Fritz Regel, Die deutsche 
Forschung in tiirkische Vordasien (Leipzig, I 9 J 5 ) 1 M. Roloff, 
Arabien und seine Bedeutung fiir die Erstarkung des Osmanen- 
reiches (Leipzig, 1915) ; A. Paquet, Die jiidische Kolonien in 
Paldstina (Weimar, 1915) ; C. Nawratzki, Die jiidische Koloni- 
sation Paldstinas (Munich, 19^) 5 D. Trietsch, Die Juden der 
Tiirkei (Leipzig, 1915). Two notable magazine articles are: 
R. Hennig, “Der verkehrsgeographische Wert des Suez—und des 
Bagdad-Weges,” in Geographische Zeitschrift, I9 I 6, pp. 649-656; 
A. Tschawisch, “Der Islam und Deutschland—Wie soli man sich 
die Zukunft des Islams denken?”, in Deutsche Revue, 1915. 
Volume III, pp. 249 et seq. 


3°8 


THE BAGDAD RAILWAY 


8 See advertisements regarding the society and its work in a 
series of pamphlets Lander und V olker der Turkei, edited by 
Dr. Hugo Grothe (Leipzig, 1915, et seq.), and descriptions of 
similar organizations in a series Orientbiichcrei, edited by Dr. 
Ernst Jackh (Stuttgart and Berlin, 1914, et seq.). 

8 “Report of the Commission Appointed by Act of Parliament 
to Enquire into the Operations of War in Mesopotamia,’’ Par¬ 
liamentary Papers, 1917, No. Cd. 8610. 

10 W. S. Churchill, The World Crisis, 1910-1915 (New York, 
1923), PP- 529-535; A. MacCallum Scott, Winston Churchill in 
Peace and War (London, 1916), Chapter X. 

11 C. C. Repington, The First World War, 1914-1918 (2 vol¬ 
umes, London, 1920), Volume I, pp. 42, 51, etc. ad lib.; Churchill, 
op. cit., pp. 537 - 538 . 

“The italics are mine. The proposed debarkation of troops, 
however, was certain to involve a breach of Persian neutrality. 
Cf. Parliamentary Papers, 1917, No. Cd. 8610. 

18 Ibid. Regarding the Franco-German agreement of February 
15, 1914, cf. supra, pp. 246-250. 

14 The text of the agreement between England, France and 
Russia regarding the disposition of Constantinople and other 
portions of Turkey is to be found in Full Texts of the Secret 
Treaties as Revealed at Petrograd (New York, The Evening 
Post, 1918) ; cf., also, R. S. Baker, Woodrow Wilson and World 
Settlement (3 volumes, Garden City, 1922), Volume I, Chapter 
III. The text of the Treaty of London between Italy and the 
Allies is to be found in Parliamentary Papers, 1920, No. Cmd. 
671, Miscellaneous No. 7. 

“The best single work on military operations in Turkey during 
the Great War is Edmund Dane’s British Campaigns in the 
Nearer East, 1914-1918 (2 volumes, London, 1919). Regarding 
the Caucasus campaigns of 1914-1915 cf. M. P. Price, War and 
Revolution in Asiatic Russia (London, 1918), Chapter I; R. 
Machray, “The Campaign in the Caucasus,” in the Fortnightly 
Review, Volume 97 (1915), PP- 458-471. Excellent accounts of 
the first Turkish offensive against the Suez Canal are to be 
found in G. Douin, Un episode de la guerre mondiale: Vattaque 
du canal de Suez, 3 Fevrier, 1915 (Paris, 1922) ; C. Stienon, “Sur 
le chemin de fer de Bagdad,” in Revue des deux mondes, 6 series, 
Volume 5 (1916), PP- 148-174; T. Wiegand, Sinai (Berlin, 1920) ; 
N. Moutran, La Syrie de domain: France et Syrie (Paris, 1916) ; 
R. Hennig, Der Kampf um den Suezkanal (Stuttgart, 1915) ; E. 
Serman, Mit den Tiirken an der Front (Berlin, 1915) ; J. Wal- 
ther, Zum Kampf in der Wiiste am Sinai und Nil (Leipzig, 
1916) ; P. Schweder, Im tiirkischen Hauptquartier (Leipzig, 
1916) ; Eine Geschichte der Turkei im Weltkriege (Munich, 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 309 

1919). For the Mesopotamian expedition of 1914-1915 consult 
Despatches Regarding Operations in the Persian Gulf and Meso¬ 
potamia (London, the War Office, 1915) ; G. M. Chesney, “The 
Mesopotamian Breakdown,” in the Fortnightly . Review, Volume 
102 (1917), pp. 247-256; H. B. Reynardson, Mesopotamia, 1914- 
I 9 I 5 (London, 1919) ; C. H. Barber, Besieged in Kut and After 
(Edinburgh, 1917). Of the great quantity of material available 
on the Dardanelles campaign, cf., in particular, the following: 
Gallipoli: der Kampf um den Orient, von einem OtHzier aus dem 
Stab des Marschalls Liman von Sanders (Berlin, 1916) ; General 
Sir Ian Hamilton, Gallipoli Diary (London, 1920) ; H. W. Nevin- 
son, The Dardanelles Campaign (London, 1918) ; S. A. Moseley, 
The Truth About the Dardanelles (London, 1916) ; John Mase¬ 
field, Gallipoli (London, 1916). 

16 Parliamentary Papers, 1917, No. Cd. 8610; C. V. F. Town- 
shend, My Campaign in Mesopotamia (London, 1920). 

17 Regarding renewed German activity and interest in the Near 
East after the elimination of Serbia from the war seemed to 
bring the Drang nach Osten within the realm of practical politics, 
cf.: R. Zabel, lm Kampfe um Konstantinopel und die wirtschaft- 
liche Lage der Tiirkei imhrend des Weltkrieges (Leipzig, 1916) *, 
C. H. Muller, Die wirtschaftliche Bedeutung der Bagdadbahn 
(Hamburg, 1917) ; R. Junge, Die deutsch-tiirkischen Wirtschafts- 
beziehungen (Weimar, 1916) ; E. Marre, Die Tiirken und wir 
nach dem Kriege: ein praktisches Wirtschaftsprogramm (Berlin, 
1916) ; H. Rohde, Deutschland in Vorderasien (Berlin, 1916) ; 
H. W. Schmidt, Auskunftsbuch fiir den Handel mit der Tiirkei 
(Leipzig, 1917) ; E. Mygind, Anatolien und seine wirtschaftliche 
Bedeutung (Berlin, 1916) ; C. V. Bichtligen, “Die Bagdadbahn, 
eine Hochstrasse des Weltverkehrs in ihrer wirtschaftliche Be¬ 
deutung,” in Soziale Revue, 16 year (1916), pp. 1-11, 123-139; 
F. C. Endres, Die Tiirkei (Munich, 1916) ; A. Philippsohn, Das 
turkische Reich (Weimar, 1916) ; H. Kettner, Vom Goidenen Tor 
zum Goidenen Horn und nach Bagdad (Berlin, 1917). For the 
point of view of Allied sympathizers, cf.: E. F. Benson, Deutsch¬ 
land iiber Allah (London, 1917), and Crescent and Iron Cross 
(New York, 1918) ; E. A. Martel, L’emprise austro-allemande sur 
la Turquie et VAsie Mineure (Paris, 1918) ; H. C. Woods, The 
Cradle of the War (New York, 1919), and an article, “The 
Bagdad Railway in the War,” in the Fortnightly Review, Volume 
102 (1917), pp. 235-247; J. Thureau, “La penetration allemande 
en Asie Mineure,” in Revue politique et parlementaire, Volume 
86 (1916), pp. 19-44; R. Lane, “Turkey under Germany’s Tute¬ 
lage,” in Unpopular Review, Volume 9 (1918), pp. 328 et seq.; 
N. Markovitch, Le pangermanisme en Orient (Nice, 1916) ; A. J. 
Toynbee, Turkey, a Past and a Future (New York, 1917)• 


3 io 


THE BAGDAD RAILWAY 


M Quoted in The Near East, November 12, 1915. For other 
material regarding construction of the Bagdad Railway during 
the war and its utilization for military purposes, cf.: Report of 
the Bagdad Railway Company, 1914, PP- 6-7; I 9 X 5 > PP- 3-6; The 
Engineer, February 4, 1915; “Transportation in the War—The 
Railways of Mesopotamia,” in Modern Transport (London), 
November, 1919; D. G. Heslop, “The Bagdad Railway,” in The 
Engineer (London), November 12 and 26 and December 3 and 17, 
1920; “Railways of Mesopotamia,” in the Railway Gazette (Lon¬ 
don), War Transportation Number, September 21, 1920, pp. 129- 
140; “Die Bagdadbahn und der Durchschlag des letzten grossen 
Tunnels,” in Asien, 14 year (1917), PP- 97 ” 101 - 

“Dane, op. cit., Volume I, Chapters VIII-XII, inclusive; “The 
German-Turkish Expedition Against the Suez Canal in 1916,” in 
Journal of the United Service Institution, Volume 65 (London, 
1920), pp. 353-357. 

20 Hayes, op. cit., pp. 142-143. 

21 Quoted from the official text as given in E. E. Robinson and 
V. J. West, The Foreign Policy of Woodrow Wilson, 1913-191/ 
(New York, 1917), PP- 403-405. 

22 The New York Times, November 13, 1917. 

23 Supra, p. 285. 

24 Baker, op. cit., Volume I, Chapter IV, contains an excellent 
account of the inter-Allied negotiations of 1916-1917 regarding 
Asiatic Turkey, based upon the private papers of Woodrow Wil¬ 
son. Cf., also, Full Texts of the Secret Treaties as Revealed at 
Petrograd. 

36 The Treaty provided that the Bagdad Railway should not be 
extended southward from Mosul or northward from Samarra 
without the express consent of both France and Great Britain 
and in no case before the construction of a railway from Bagdad 
to Aleppo via the Euphrates Valley—the purpose being, as far as 
possible, to develop southern Mesopotamia and the Syrian coast 
rather than Kurdistan. By a subsequent agreement of December, 
1918, between Messrs. Lloyd George and Clemenceau, Mosul was 
transferred to Great Britain. 

28 W. L. Westermann, “The Armenian Problem and the Dis¬ 
ruption of Turkey,” in What Really Happened at Paris — The 
Story of the Peace Conference, 1918-1919, by American Delegates, 
edited by E. M. House and C. Seymour (New York, 1921), pp. 
176-203. Cf. p. 183. 

27 The text of the Sykes-Picot Treaty was first published by 
The Manchester Guardian, January 8, 1920, and was reprinted in 
Current History, Volume XI (1920), pp. 339-341. Cf., also, 
Bowman, The New World, pp. 100-104; Baker, op. cit., pp. 67-69. 

28 Baker, op. cit., pp. 68-70. The negotiations concerning the 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 311 

St. Jean de Maurienne Agreement extended from the autumn of 
I9 J 6 to August, 1917* The agreement appears to have been 
negotiated with the Italians by Mr. Lloyd George, in April, 1917, 
while Mr. Balfour was in America with the British Mission. It 
was amended in August, as a result of the insistence of the 
Italians that they had not received an adequate share of the 
spoils. 

20 President Wilson’s address to a joint session of the Congress 
of the United States, January 8, 1918, setting forth the famous 
Fourteen Points of a durable peace. Quoted from James Brown 
Scott, President Wilson’s Foreign Policy (New York, 1918), 

PP- 354 - 363 . 

30 Regarding General Maude’s brilliant campaign in Mesopo¬ 
tamia, cf.: Dane, op. cit., Volume II, Chapters II, III, XII; E. F. 
Eagan, The War in the Cradle of the World (London, 1918) ; 
Kermit Roosevelt, War in the Garden of Eden (New York, 1919) ; 
Sir Charles Collwell, Life of Sir Stanley Maude (London, 1920) ; 
E. Betts, The Bagging of Bagdad (London, 1920) ; E. Candler, 
The Long Road to Bagdad (London, 1920) ; C. Cato (pseudo¬ 
nym), The Navy in Mesopotamia (London, 1917) ; F. Maurice, 
“The Mesopotamian Campaign,” in Asia, Volume 18 (New York, 

1918) , pp. 933 - 936 . 

31 British intrenchment in Mesopotamia, 1917-1920, is described 
in the following: “Review of the Civil Administration of Meso¬ 
potamia,” Parliamentary Papers, No. Cmd. 1061 (1920); R. 
Thomas, Report on Cotton Experimental Work in Mesopotamia 
(Bagdad, 1919) ; “Cotton Growing in Mesopotamia,” Bulletin of 
the Imperial Institute, Volume 18 (London, 1920), pp. 73-82; 
Mesopotamia as a Country for Future Development (Cairo, 
Ministry of Public Works, 1919) ; “Transportation and Irrigation 
in Mesopotamia,” Commerce Reports, No. 50 (Washington, 

1919) , PP- 948-954; Sir H. P. Hewett, Some Impressions of Meso¬ 
potamia (London, 1919) ; C. R. Wimshurst, The Wheats and 
Barleys of Mesopotamia (Basra, 1920) ; Review of the Civil 
Administration of the Occupied Territories of Irak (Bagdad, 
1918) ; L. J. Hall, Inland Water Transport in Mesopotamia (Lon¬ 
don, 1921) ; Sir Mark Sykes, The Commercial Future of Bagdad 
(London, 1917) ; “Turkish Rule and British Administration in 
Mesopotamia,” in The Quarterly Reznew, Volume 232 (1919), 
pp. 401 et seq.) W. Ormsby Gore, “The Organization of British 
Responsibilities in the Middle East,” in Journal of the Central 
Asian Society, Volume 7 (1920), pp. 83-105; I. A. Shah, “The 
Colonization of Mesopotamia,” in United Service Magazine, 
Volume 179 (ft>i 9 )> PP- 350 et seq. 

“Townshend, op. cit., pp. 375 et seq.) Djemal Pasha, op. cit., 
Chapter VII; Current History, Volume XII (1920), pp. 117-118; 


312 


THE BAGDAD RAILWAY 


A. D. C. Russell, loc. ext., pp. 325 et seq. ; F. C. Endres, Der Welt - 
krieg der Tiirkei (Berlin, 1919)* 

33 Regarding General Allenby’s campaigns in Palestine and 
Syria, see: H. Pirie-Gordon, A Brief Record of the Advance of 
the Egyptian Expeditionary Force (London, 1919) ; W. T. Mas¬ 
sey, Allenby’s Final Triumph (London, 1920) ; C. C. R. Murphy, 
Soldiers of the Prophet (London, 1921) ; H. O. Lock, The Con¬ 
querors of Palestine Through Forty Centuries (New York, 
1921) ; R. E. C. Adams, The Modern Crusaders (London, 1920) ; 
H. Dinning, Nile to Aleppo: With the Light Horse in the Near 
East (London, 1920) ; P. E. White, The Disintegration of the 
Turkish Empire (London, 1920) ; C. T. Atkinson, “General Liman 
von Sanders and His Experiences in Palestine,” Army Quarterly, 
Volume 3 (London, 1922), pp. 257-2751 A. Aaronsohn, Mit der 
tiirkischen Armee in Palastina (Berne, 1918) ; J. Bourelly, Caw- 
pagne d’Egypte et de Syrie contre les Turcs (Paris, 1919) ; G. 
Gautherot, La France en Syrie et en Cilicie (Paris, 1920) ; C. 
Stienon, Les camp agues d’ Orient et les intcrets de l’entente (Paris, 
1918), and La defense de l’Orient et le role de VAngleterre (Paris, 
1918) ; A. Mandelstamm, Le sort de l’Empire Ottoman (Paris, 
1917) ; G. A. Schreiner, From Berlin to Bagdad: Behind the 
Scenes in the Near East (New York, 1918). 

34 H. Charles Woods, The Cradle of the War, p. 271. 

38 See a suggestive article by Hilaire Belloc, “Europe’s New 
Paths of Empire,” in Our World (New York), October, 1922, 
pp. 41-46; The Evening Post (New York), January 3 and March 
27, 1919. 

30 The Treaty of Peace with Germany, Articles 155, 258, 260, 
261, 297. 

37 “Treaty of Peace with Turkey, Signed at Sevres August 10, 
1920,” Parliamentary Papers, No. Cmd. 964, Treaty Series No. 11, 
1920; “Tripartite Agreement Between the British Empire, France, 
and Italy, Respecting Anatolia, Signed at Sevres, August 10, 
1920,” Parliamentary Papers, No. Cmd. 963, Treaty Series No. 12, 
1920. An official summary of the Sevres treaty was published in 
The Nation (New York), International Relations Section, Vol¬ 
ume in (1920), pp. 21-28, and in Current History, Volume XIII 
(1921), pp. 164-184. An excellent discussion of the main pro¬ 
visions of the treaty and its probable effects is to be found in 
Bowman’s The New World, Chapters XXIV and XXVI. 

38 Regarding the negotiations at the Paris Conference by which 
the claims of Italy were disregarded in favor of those of Greece, 
cf. Baker, op. cit., Volume II, Chapter XXXII, and Volume III, 
Documents Nos. 1, 31-41. 

* Preamble to the Tripartite Agreement of August 10, 1920. 

"Regarding the Turkish Nationalist movement, see: Major 


TURKEY, CRUSHED TO EARTH, RISES AGAIN 313 

\ 

General James G. Harbord, “Mustapha Kemal Pasha and His 
Party,” in the World's Work, Volume 36 (London, 1920), pp. 470- 
482; M. Paillares La kemalisme devant les Allies (Paris, 1922) ; 
“The Recovery of the Sick Man of Europe,” an excellent review, 
with a colored map, in the Literary Digest, November 11, 1922, 
pp. 17 et seq.; M. K. Zia Bey, “How the Turks Feel,” in Asia, 
Volume XXII (1922), pp. 857 et seq., and “The New Turkish 
Democracy,” in The Nation, Volume 115 (New York, 1922), pp. 
546-548; Major General Sir Charles Townshend, “Great Britain 
and the Turks,” in Asia, Volume XXII (1922), pp. 949-953; Clair 
Price, “Mustapha Kemal and the Angora Government,” in Cur¬ 
rent History, Volume XVI (1922), pp. 790-800; Ludwell Denny, 
“The Turk Comes Back,” in The Nation, Volume 115 (1922), pp. 
575 - 577 ; “The New Epoch in Turkey,” in the Muslim Standard 
(London), November 9, 1922. 

41 A. J. Toynbee, The Western Question in Greece and Turkey: 
A Study in the Contact of Civilizations (New York, 1922), p. 190. 
Professor Toynbee’s book is the most noteworthy of recent con¬ 
tributions to the history of Turkey since the Great War. 

42 The text of the National Pact, as translated from the French, 
is to be found in The Nation, Volume 115 (1922), pp. 447-448, in 
Current History, Volume XVII (1922), pp. 280-281, and in Toyn¬ 
bee, op. cit., pp. 207-211 (in both French and English). 

43 Infra., pp. 316-317, 323-324. 


1 


CHAPTER XII 


THE STRUGGLE FOR THE BAGDAD RAILWAY 

IS RESUMED 

Germany is Eliminated and Russia Withdraws 

The Great War has completely destroyed German in¬ 
fluence in the Near East. In the way of any resumption 
of German enterprise in Turkey are formidable obstacles 
which are not likely to be removed for some time. To 
begin with, the Turks themselves will not encourage 
German attempts to recover the Bagdad Railway or other 
property rights which were liquidated by the Treaty of 
Versailles. Among Turkish Nationalists there is satis¬ 
faction that Turkey has “shaken off the yoke of the am¬ 
bitious leaders who dragged the country into the general 
war on the side of Germany” and has got rid of the “ar¬ 
rogance” of the Germans who infested the Near East 
during the last years of the war. Resentment at German 
military domination of Turkey during 1917 and 1918 
will not soon disappear. 1 

Furthermore, Germany possesses neither the disposi¬ 
tion nor the power to regain her former preeminence in 
the Near East. The confiscation by the Treaty of Ver¬ 
sailles of private property in foreign investments has 
set a precedent which will make German investors—as 
well as prudent investors everywhere—extremely chary 
of utilizing their funds for the promotion of such en¬ 
terprises as the Bagdad Railway. The surplus produc¬ 
tion and surplus capital of Germany may be absorbed by 
reparations payments or attracted to such enterprises as 

314 



NEW STRUGGLE FOR BAGDAD RAILWAY 


315 


the reconstruction of the German merchant marine. But 
the Drang nach Osten. has become a Thing of the past. 
The dismemberment of the Austrian Empire and the 
erection of the Jugoslav Kingdom have shut off German 
access, through friendly states, to the Balkan Peninsula 
and Asiatic Turkey. Formidable customs barriers will 
stand in the way of overland trade with the Near East 
and render railway traffic from “Berlin to Bagdad” un¬ 
profitable. Defeat and disarmament have destroyed Ger¬ 
man prestige in the Moslem world. Democratization of 
both Germany and Turkey, it is hoped, will render in¬ 
creasingly difficult the kind of secret intrigue that char¬ 
acterized Turco-German relations during the regime of 
William II and of Abdul Hamid. If Germany returns to 
the Near East in the next generation or two, it is not 
likely to be in the role of an Imperial Germany promot¬ 
ing railway enterprises of great economic and strategic 
importance. 

Russian diplomatic policy toward Turkey has likewise 
undergone important changes. Imperial Russia had been 
a bitter opponent of Imperial Germany in the Bagdad 
Railway project. Imperial Russia had conspired with 
Great Britain and France to bring about the collapse and 
dismemberment of the Ottoman Empire. Imperial Rus¬ 
sia was the “traditional enemy” of the Turk. But Im¬ 
perial Russia was destroyed in 1917 by military defeat 
and social revolution. Regardless of the pronunciamentos 
of bourgeois imperialists like Professor Milyukov, revo¬ 
lutionary Russia was certain to look upon the Near 
Eastern question in a new light. Political and economic 
disorganization incidental to the war and the revolution 
would have made it imperative for any government in 
Russia to curtail its imperialistic pretensions. And with 
the advent of Bolshevism the outcome was certain. A 
government which was anti-capitalist and anti-imperialist 


3 i 6 


THE BAGDAD RAILWAY 


could not sanction Russian “spheres of interest” or Rus¬ 
sian territorial aggrandizement at the expense of Turkey. 
A government which preached “self-determination of 
peoples” and “no annexations” could not confirm the 
secret treaties of 1915-1916. A government which was 
engaged in repelling foreign invasion and in resisting 
counter-revolutionary insurrections had to keep within 
strict limits its military liabilities. Therefore, Soviet 
Russia speedily foreswore any intention of occupying 
Constantinople, declared unreservedly for a free Armenia, 
and proceeded forthwith to withdraw its troops from 
Persia. These measures were considered “a complete 
break with the barbarous policy of bourgeois civilization 
which built the prosperity of the exploiters among the 
few chosen nations upon the enslavement of the labor¬ 
ing population in Asia,” as well as an expression of Bol¬ 
shevist Russia’s “inflexible determination to wrest human¬ 
ity from the talons of financial capital and imperialism, 
which have drenched the earth with blood in this most 
criminal of wars.” 2 

Turkish Nationalist resistance to the Treaty of Sevres 
met with a sympathetic response on the part of Bolshevist 
Russia, and on March 16, 1921, the Government of the 
Grand National Assembly and the Government of the 
Russian Socialist Federated Soviet Republic signed at 
Moscow a treaty to confirm “the solidarity which unites 
them in the struggle against imperialism.” By the terms 
of this treaty Russia refused to recognize the validity of 
the Treaty of Sevres or of any other “international acts 
which are imposed by force.” Russia ceded to Turkey 
the territories of Kars and Ardahan, in the Caucasus 
region, as a manifestation of full accord with the prin¬ 
ciples of the National Pact. The Soviet Republic, 
“recognizing that the regime of the capitulations is in¬ 
compatible with the national development of Turkey, as 


NEW STRUGGLE FOR BAGDAD RAILWAY 


3U 


well as with the full exercise of its sovereign rights, con¬ 
siders null and void the exercise in Turkey of all func¬ 
tions and all rights under the capitulatory regime.” In 
particular, Russia freed Turkey “from any financial or 
other obligations based on international treaties con¬ 
cluded between Turkey and the Government of the Tsar.” 
As regards the construction of railways in Anatolia, the 
Soviet Government completely reversed the former policy 
of Imperial Russia, which was to oppose all such rail¬ 
ways as a strategic menace. 3 It was now provided that, 
“with the object of facilitating intercourse between their 
respective countries, both Governments agree to take in 
concert with each other all measures to develop and main¬ 
tain within the shortest possible time, railway, telegraphic, 
and other means of communication,” as well as measures 
“to secure the free and unhampered traffic of passengers 
and commodities between the two countries.” Finally, 
both countries agreed to stand together in resisting all 
foreign interference in their domestic affairs: “Recog¬ 
nizing that the nationalist movements in the East,” reads 
the treaty, “are similar to and in harmony with the 
struggle of the Russian proletariat to establish a new 
social order, the two contracting parties assert solemnly 
the rights of these peoples to freedom, independence, and 
free choice of the forms of government under which 
they shall live.” 4 

No more complete disavowal of Russian imperialism 
could be desired by the New Turkey. It is by no means 
certain, however, that Russia will continue indefinitely 
to pursue so magnanimous a policy in the Near East. 
With the development of her natural resources and the 
extension of industrialism, it is not improbable that Rus¬ 
sia—in common with the other Great Powers—will once 
again feel the urge to imperialism. Raw materials, mar¬ 
kets, the maintenance of unimpeded routes of commercial 


3i8 


THE BAGDAD RAILWAY 


communication, and opportunities for profitable invest¬ 
ment of capital are likely to be considered—in the present 
anarchic state of international relations—as essential to 
an industrial state under working-class government as 
to an industrial state under bourgeois administration. If 
such be the case, Russian economic penetration in Turkey 
and Persia may be resumed, and Russian eyes may once 
more be cast covetously at Constantinople. “In Mongolia 
and Tibet, in Persia and Afghanistan, in Caucasia and at 
Constantinople, the Russian has been pressing forward 
for three hundred years,” writes an eminent American ' 
geographer, “and no system of government can stand that 
denies him proper commercial outlets.” 5 

Nevertheless, whatever be the future policy of Rus¬ 
sia in the Near East, for the present the Russian Re¬ 
public has no economic or strategic interests which are 
inconsistent with the national development of the Turk¬ 
ish people. Certainly Russia has neither the economic 
nor the political resources to demand a share in the Bag¬ 
dad Railway or to seek for herself other railway conces¬ 
sions in Anatolia. And the Western Powers are little 
likely to heed the wishes of the Soviet Government until 
such time as those wishes are rendered articulate in a 
language the Western Powers understand—the language 
of power. 

France Steals a March and Is Accompanied by Italy 

Those who believed that the defeat of Germany and 
the withdrawal of Russia would solve all problems of 
competitive imperialism in the Near East were destined 
to be disillusioned. For no sooner was the war over than 
France and Great Britain took to pursuing divergent 
policies regarding Turkey. The rivalry between these 
two powers—which had been terminated for a time by 


NEW STRUGGLE FOR BAGDAD RAILWAY 319 

the Entente of 1904—was resumed in all its former in¬ 
tensity. The Entente, in fact, had been formed because 
of common fear of Germany, rather than because of co¬ 
incidence of colonial interests \ and with that fear re¬ 
moved, the foundation of effective cooperation had been 
undermined . 6 The Great War may be said to have 
terminated the first episode of the great Bagdad Rail¬ 
way drama—the rise and fall of German power in the 
Near East; it opened a second episode, which promises 
to be equally portentous—an Anglo-French struggle for 
the right of accession to the exalted position which Ger¬ 
many formerly occupied in the realm of the Turks. 

Anglo-French rivalry in the Near East will not be 
an unprecedented phenomenon. ‘‘Since the Congress 
of Vienna in 1814, France and Great Britain have never 
fought in the Levant with naval and military weapons 
(though they have several times been on the verge of 
open war), but their struggle has been real and bitter 
for all that, and though it has not here gone the length 
of empire-building, it has not been confined to trade. Its 
characteristic fields have been diplomacy and culture, 
its entrenchments embassies, consulates, religious mis¬ 
sions, and schools. It has flared up on the Upper Nile, 
in Egypt, on the Isthmus of Suez, in Palestine, in the 
Lebanon, at Mosul, at the Dardanelles, at Salonica, in 
Constantinople. The crises of 1839-41 and 1882 over 
Egypt and of 1898 over the Egyptian Sudan are land¬ 
marks on a road that has never been smooth, for con¬ 
flicts [of one sort or another] have perpetually kept 
alive the combative instinct in French and English mis¬ 
sionaries, schoolmasters, consuls, diplomatists, civil serv¬ 
ants, ministers of state, and journalists. One cannot 
understand—or make allowances for—the post-war re¬ 
lations of the French and British Governments over the 
‘Eastern Question’ unless one realizes this tradition of 


320 


THE BAGDAD RAILWAY 


rivalry and its accumulated inheritance of suspicion and 
resentment. It is a bad mental background for the in¬ 
dividuals who have to represent the two countries. The 
French are perhaps more affected by it than the English, 
because on the whole they have had the worst of the 
struggle in the Levant as well as in India, and failure 
cuts deeper memories than success.” 7 

French statesmen were dissatisfied with the division of 
the spoils of war in the Near East. They had a feeling 
that here, as elsewhere, Britain had obtained the lion’s 
share. They believed that Mr. Lloyd George had been 
guilty of sharp practice in his agreement of December, 
1918, with M. Clemenceau, by the terms of which Mosul 
and Palestine were to be turned over to Great Britain. 8 
Frenchmen were suspicious of British solicitude for the 
Arabs, which they believed was not based upon disin¬ 
terested benevolence; in fact, self-determination for the 
Arabs came to be considered a political move to render 
precarious the French mandate for Syria. French 
patriots chafed at British emphasis upon the fact that 
“the British had done the fighting in Turkey almost with¬ 
out French help” and that “there would have been no 
question of Syria but for England and the million sol¬ 
diers the British Empire had put in the field against the 
Turks.” French pride was hurt by the rapid rise of 
British prestige in a region where France had so many 
interests. And prestige—diplomatic, military, religious, 
cultural, and economic—has always been an important 
desideratum in Near Eastern diplomacy. 9 

French dissatisfaction with the Turkish settlement was 
one of the issues of the San Remo Conference of April, 
1920, at which were assigned the mandates for the terri¬ 
tories of the former Ottoman Empire. Exclusive control 
by Great Britain of the oilfields of the Mosul district 
was so vigorously contested that M. Philippe Berthelot, 


NEW STRUGGLE FOR BAGDAD RAILWAY 321 

of the French Foreign Office, and Professor Sir John 
Cadman, Director of His Majesty’s Petroleum Depart¬ 
ment, were instructed to work out a compromise. Thus 
came into existence the San Remo Oil Agreement of 
April 24, 1920, by which Great Britain, in effect, assigned 
to France the former German interest in the Turkish 
Petroleum Company’s concession for exploitation of the 
oilfields in the vilayets of Mosul and Bagdad. 10 But the 
British drove a shrewd bargain, for it was provided, in 
consideration, that the French Government should agree, 
“as soon as application is made, to the construction of 
two separate pipe-lines and railways necessary for their 
construction and maintenance and for the transport of 
oil from Mesopotamia and Persia through French spheres 
of influence to a port or ports on the Mediterranean.” 
The oil thus transported was to be free of all French 
taxes. 11 

French imperialists likewise were dissatisfied with the 
disposition of the Bagdad Railway as provided for by 
the unratified Sevres Treaty. French bankers had held 
a thirty per cent interest in the Bagdad line while it 
was under German control, 12 and they believed, for this 
reason, that they were entitled to a controlling voice in 
the enterprise when it should be reorganized by the 
Allies. Although the settlement at Sevres—the Treaty 
of Peace with Turkey and the Tripartite Agreement be¬ 
tween Great Britain, France, and Italy—recognized the 
special interests of France in the Bagdad Railway, and 
particularly in the Mersina-Adana branch, it provided, 
as has been seen, for international ownership, control, 
and operation. 13 Now, Frenchmen were suspicious of 
internationalization, particularly where British participa¬ 
tion was involved. Had not the condominium in Egypt 
proved to be a step in the direction of an eventual British 
protectorate? Might not the history of the Suez Canal 


3 22 


THE BAGDAD RAILWAY 


be repeated in the history of the Bagdad Railway? 
Would Great Britain look with any greater equanimity 
upon French, than upon German, interests in one of the 
great highways to I,ndia? To answer these questions was 
but to increase the French feeling of insecurity. 

French dissatisfaction with the distribution of the 
spoils in the Near East and French fear of British im¬ 
perial power and prestige—these were factors in a new 
alignment of the diplomatic forces in Turkey during 
1920-1922. British imperialists were desirous of keeping 
Turkey weak. A weak Turkey could never again menace 
Britain’s communications in the Persian Gulf and at Suez; 
a weak Turkey could be of no moral or material assist¬ 
ance to restless Moslems in Egypt and India. To keep 
Turkey weak the Treaty of Sevres had loaded down 
the Ottoman Treasury with an enormous burden of rep¬ 
arations and occupation costs (to which France could 
not object without repudiating the principle of repara¬ 
tions) ; had taken away Turkish administration of 
Smyrna and Constantinople, the two ports essential to 
the commercial life of Anatolia; and had made possible 
a Greek war of devastation and extermination in the 
homeland of the Turks. France, on the other hand, 
would have preferred to see Turkey reasonably strong. 
A strong, prosperous Turkey would the more readily 
pay off its pre-War debt, of which French investors held 
approximately sixty per cent; payment of -this debt was 
more important to France than payment of Turkish rep¬ 
arations. A strong Turkey, furthermore, might fortify 
the French position in the Near East. As Germany had 
utilized Ottoman strength against Russia and Great Bri¬ 
tain, so France might utilize Nationalist Turkey against 
a Bolshevist Russia which would not pay its debts or 
an imperial Britain which might prove unfaithful to the 
Entente. 14 


NEW STRUGGLE FOR BAGDAD RAILWAY 323 

Anglo-French differences in the Near East were 
brought to a head by the rapid rise of the military power 
of the Angora Government, for it was against France 
that Mustapha Kami's troops launched their principal 
early attacks. General Gouraud—his hands tied by an 
Arab rebellion which had necessitated a considerable ex¬ 
tension of his lines in Syria—was unable to repulse the 
Turkish invasion of Cilicia, which reached really seri¬ 
ous proportions in the autumn of 1920. Time and again 
French units were defeated and French garrisons mas¬ 
sacred by the victorious Nationalists. In these circum¬ 
stances, France “had to choose between the two follow¬ 
ing alternatives: either to maintain her effectives and to 
continue the war in Cilicia, or to negotiate with the de 
facto authority which was in command of the Turkish 
troops in that region.”* The French armies in Syria and 
Cilicia already numbered more than 100,000 men; to re¬ 
enforce them would have been to flout the opinion of 
the nation and the Chamber, “which had vigorously ex¬ 
pressed their determination to put an end to cruel blood¬ 
shed and to expenditure which it was particularly diffi¬ 
cult to bear.” To negotiate with Mustapha Kemal was, 
to all intents and purposes, to scrap the unratified Treaty 
of Sevres. The French Government chose the latter al¬ 
ternative. It is said that during the London Conference 
of February-March, 1921, “M. Briand declared to Mr. 
Lloyd George on several occasions, without the British 
Prime Minister making the slightest observation, that 
he would not leave England without having concluded 
an agreement with the Angora delegation. M. Briand 
pointed out that neither the Chamber nor French public 
opinion would agree to the prolongation of hostilities, 
involving as they did losses which were both heavy and 
useless.” 15 

Accordingly, on March 9, 1921, there was signed at 


324 


THE BAGDAD RAILWAY 


London a Franco-Turkish agreement terminating hos¬ 
tilities in Cilicia. The Turkish Nationalists recognized 
the special religious and cultural interests of France in 
Turkey and granted priority to French capitalists in the 
awarding of concessions in Cilicia and southern Armenia. 
French interests in the Bagdad Railway were confirmed. 
In return, France was to evacuate Cilicia, to readjust the 
boundary between Turkey and Syria, and to adopt a more 
friendly attitude toward the Government of the Grand 
National Assembly. 16 

The Italian Government was only too glad to have so 
excellent an excuse for throwing over the Treaty of 
Sevres, which had thoroughly frustrated Italian hopes 
in Asia Minor to the advantage of Greece. Italian 
troops, furthermore, had been driven out of Konia and 
were finding their hold in Adalia increasingly precarious; 
the Italian Government had neither the disposition nor 
the resources to wage war. Therefore, on March 13, 
1921, the Italian and Turkish ministers of foreign affairs 
signed at London a separate treaty, providing for “eco¬ 
nomic collaboration” between Turkey and Italy in the hin¬ 
terland of Adalia, including part of the sanjaks of Konia, 
Aidin, and Afiun Karahissar, as well as for the award to 
an Italian group of the concession for the Heraclea coal 
mines. 17 The Royal Italian Government pledged itself 
to “support effectively all the demands of the Turkish 
delegation relative to the peace treaty,” more especially 
the demands of Turkey for complete sovereignty and for 
the restitution of Thrace and Smyrna. Italian troops 
were to be withdrawn from Ottoman soil. 18 

During the summer of 1921 further negotiations were 
conducted between France and Turkey for the purpose 
of elaborating and confirming their March agreement. 
The outcome was the so-called Angora Treaty, signed 
October 20, 1921, by M. Henri Franklin-Bouillon, a 


NEW STRUGGLE FOR BAGDAD RAILWAY 325 

special agent of the French Government, and Yussuf 
Kemal Bey, Minister of Foreign Affairs in the Govern¬ 
ment of the Grand National Assembly. This treaty 
formally brought to an end the state of war between the 
two countries, provided for the repatriation of all pris¬ 
oners, defined new boundaries between Turkey and Syria, 
and awarded valuable economic privileges to French 
capitalists. It obligated the French Government “to make 
every effort to settle in a spirit of cordial agreement all 
questions relating to the independence and sovereignty of 
Turkey.” 19 

The Bagdad Railway was given a great deal of con¬ 
sideration in the Angora Treaty. The Turks wanted 
possession of the line because of its great political and 
strategic value; French capitalists sought full recogni¬ 
tion of their previous investments in the railway,'together 
with a controlling interest in its operation. A solution was 
reached which fully satisfied both Turkish Nationalists 
and French imperialists. The Turco-Syrian boundary 
was so “rectified” that the Bagdad Railway from Haidar 
Pasha to Nisibin was to lie within Turkish territory, 
whereas formerly the sections from the Cilician Gates 
to Nisibin lay within the French mandate for Cilicia and 
Syria. 20 jin return for these territorial readjustments the 
Turkish Government assigned to a French group (to be 
nominated by the French Government) the Deutsche 
Bank’s concession for those sections of the railway, in¬ 
cluding branches, between Bozanti and Nisibin, “together 
with all the rights, privileges, and advantages attached to 
that concession.” The Government of the Grand Na- 

i f 

tional Assembly, furthermore, declared itself “ready to 
examine in the most favorable spirit all other desires 
that may be expressed by French groups relative to mine, 
railway, harbor and river concessions, on condition that 
such desires shall conform to the reciprocal interest of 


3 2 6 


THE BAGDAD RAILWAY 


Turkey and France.” In particular, the Turkish Gov¬ 
ernment agreed to take under advisement the award to 
French capitalists of concessions for the exploitation of 
the Arghana copper mines and for the development of 
cotton-growing in Cilicia. 21 

Thus France sought to make herself heir to the former. 
German estate in Asiatic Turkey. Her capitalists became 
the recipients of the kilometric guarantee for which Ger¬ 
man concessionaires had been so freely criticized. And 
in some respects the conditions of French tenancy were 
questionable. The old Bagdad' Railway concession had 
prohibited the Germans, under any and all circumstances 
to grant discriminatory rates or service to any passenger 
or shipper. 22 The conditions of French control of the 
line, however, recognized only a limited application of 
the principle of the “open door”: “Over this section and 
its branches,” reads Article io of the Angora Treaty, 
“no preferential tariff shall be established in principle. 
Each Government, however, reserves the right to study 
in concert with the other any exception to this rule which 
may become necessary. In case agreement proves im¬ 
possible, each party will be free to act as he thinks 
bestr 23 

During the spring of 1922 the concession for the op¬ 
eration of the French sections of the Bagdad Railway, as 
defined by the Angora Treaty, was assigned to the 
Cilician-Syrian Railway Company (La societe Sexploi¬ 
tation des chemins de fers de Cilicie-Nord Syrie.) The 
Mesopotamian sections of the line, from Basra to Bagdad 
and Samarra, were under the jurisdiction of the British 
Civil Administration for Irak. From Haidar Pasha to 
the Cilician Gates the Railway was being operated by 
the Turkish Nationalist Government, although its utili¬ 
zation for commercial purposes was seriously curtailed 
by the Greco-Turkish War. 24 


NEW STRUGGLE FOR BAGDAD RAILWAY 327 


British Interests Acquire a Claim to the Bagdad 

Railway 

The Angora Treaty met with a distinctly heated recep¬ 
tion from the British Government. During November 
and December, 1921, Lord Curzon carried on a lengthy 
correspondence with the French Embassy at London, in 
which he made it perfectly plain that the British Gov¬ 
ernment considered the Franklin-Bouillon treaty a breach 
of good faith on the part of France, in the light of which 
Great Britain must possess greater freedom of action 
than would otherwise be the case. 25 

Lord Curzon called into question the moral right of 
the French Government to enter into separate understand¬ 
ings with Turkey or to recognize the Angora Assembly 
as the de jure government of the country. He insisted 
that a revision of the frontier of northern Syria “could 
not be regarded as the concern of France alone”: 

“It hands back to Turkey a large and fertile extent of territory 
which had been conquered from her by British forces and which 
constituted a common gage of allied victory, although by an 
arrangement between the Allies the mandate has been awarded to 
France. The mandate is now under consideration by the League 
of Nations, and this important and far-reaching modification of 
the territory to which it applies altogether ignores the League of 
Nations, while the return to Turkey of territory handed over 
to the Allies in common without previous notification to Great 
Britain and Italy is inconsistent with both the spirit and the letter 
of the treaties which all three have signed. 

“Further, the revision provides for handing back to Turkey the 
localities of Nisibin and Jezirit-ibn-Omar, both of which are of 
great strategic importance in relation to Mosul and Mesopotamia; 
the same consideration applies to the handing back to Turkey of 
the track of the Bagdad Railway between Tchoban Bey and 
Nisibin. . . . His Majesty’s Government cannot remain indifferent 
to the manifest strategic importance to their position in Irak of 
the return to Turkey of the Bagdad Railway or of the transfer 
to that power of the localities of Jezirit-ibn-Omar and Nisibin.” 


3 2 8 


THE BAGDAD RAILWAY 


In addition to disputing the territorial readjustments 
contemplated by the Angora Treaty, the British Govern¬ 
ment challenged the transfer to French capitalists of the 
former German concession for the Bozanti-Nisibin sec¬ 
tions of the Bagdad Railway. Lord Curzon pointed out 
that Great Britain would not recognize the Franco- 
Turkish treaty as overriding the Treaty of Sevres, 
“whereby Turkey was herself to liquidate the whole 
Bagdad Railway on the demand of the principal Allies”; 
neither would the British Government assent to the award 
to France of “a large portion of the railway without re¬ 
gard to the claims of her other allies upon a concern 
which both under the Treaty of Versailles and the Treaty 
of Sevres is the Allies’ common asset.” 26 

“Apart from the immediate and premature advantage gained 
by France by this transfer of a large portion of the Bagdad line 
to a French company in advance—and therefore possibly to the 
prejudice—of the reciprocal allied arrangements contemplated by 
Article 294 of the Treaty of Sevres and Article 4 of the Tri¬ 
partite Agreement, it is necessary to point out that these stretches 
of the railway which were previously in Syria, but are now 
surrendered to Turkey, although placed in the French zone of 
economic interest, ought naturally to be divided among the Allies 
in accordance with the above mentioned treaties. . . . The transfer 
to a French company of that part of the railway which still 
remains in Syria does not in itself fulfil the provisions of the 
Treaty of Sevres, which stipulates for liquidation by the manda¬ 
tary and the assignment of the proceeds to the Financial Com¬ 
mission as an allied asset.” 

The correspondence was concluded by Lord Curzon 
with emphatic statements that “when peace is finally con¬ 
cluded the different agreements which have been nego¬ 
tiated up to date, including the Angora Agreement, will 
require to be adjusted with a view to taking their place 
in a general settlement”; that he was obliged “explicitly 
to reserve the attitude of His Majesty’s Government with 
regard to the Angora Agreement”; and that there must 






NEW STRUGGLE FOR BAGDAD RAILWAY 329 

especially be reserved for further discussion “all articles 
of the Agreement which appear to infringe the provisions 
of the Treaty of Sevres and the Tripartite Agreement. 

Subsequent events did nothing to restore Anglo-French 
unity in the Near East. At the Washington Conference 
in December, 1921, Lord Lee and M. Briand engaged in 
a verbal war over submarines which created no little 
hard feeling and suspicion in both Great Britain and 
France. Differences of opinion regarding Russia and 
other questions discussed at the Genoa Conference, to¬ 
gether with a clash over reparations in midsummer, 1922, 
strained relations still further. Charges by Greeks and 
Englishmen that France and Italy were supplying muni¬ 
tions to the Turkish Nationalists were received with 
counter-charges that British officers were aboard Greek 
warships and that British “observers” were directing 
Greek military operations in Asia Minor. 27 Feeling ran 
high in September, 1922, when—seeking to avoid a Near 
Eastern war—the French and Italian Governments with¬ 
drew their troops from the Neutral Zone of the Straits, 
leaving the British forces to face, alone, the victorious 
Nationalist army of Mustapha Kemal Pasha. British 
patriots were further irritated by the mysterious activ¬ 
ities of M. Henri Franklin-Bouillon in the negotiations 
preceding the Mudania armistice and by the claims of 
the Paris press to a great victory thereby for French 
prestige at Angora and Constantinople. Fundamental 
differences of opinion regarding reparations—culminating 
in the French invasion of the Ruhr in January, 1923— 
made still more difficult cooperation by the former Allies 
in the Near East. In fact, it might be questioned whether 
the Entente Cordiale any longer existed. 

This situation was brought into sharp relief at the 
first Lausanne Conference for Peace in the East. 28 
Great Britain’s interests were chiefly territorial. She 


330 


THE BAGDAD RAILWAY 


had abandoned all hope of destroying Turkish power by 
creating a Greek empire in Asia Minor; Greece was gone 
from Smyrna for good. But England was determined to 
maintain her hold in Mesopotamia—particularly in the 
oilfields of Mosul—and to hold out for neutralization of 
the Straits. These territorial questions occupied the 
major part of the first six weeks of the Conference. 
France had no interest in the decisions regarding the 
Straits and Mosul; therefore she supported the Turks 
and placed Lord Curzon in the position of appearing to 
be the real opponent of Turkish Nationalist ambitions 
and the principal obstacle in the way of an equitable 
settlement. Lord Curzon himself strengthened this im¬ 
pression, for many of his utterances were provocative 
and bombastic in the extreme—apparently he would not 
give up the idea that the Turks could be bluffed and 
bullied into submission. 

While the conference as a whole was debating terri¬ 
torial questions and problems concerning the rights of 
minorities, a member of the French delegation was pre¬ 
siding over the sessions of the all-important Committee 
on Financial and Economic Issues. It was in this com¬ 
mittee that questions of the Ottoman Public Debt and 
of concessions were to be threshed out; therefore it was 
in this committee that French imperialists hoped to 
achieve real successes. And while France was framing 
the economic sections of the treaty, her co-worker Italy 
was supervising the work of the Committee on the Status 
of Foreigners in Turkey, to determine the conditions 
upon which French and Italian schools and missions 
should continue their activities in Asia Minor. In this 
manner France hoped to protect adequately her economic 
and cultural interests in the Near East. 

As the work of these committees progressed, the Turks 
became more and more suspicious of French aims. The 


NEW STRUGGLE FOR BAGDAD RAILWAY 


33i 


Nationalist delegates—including Djavid Bey—were 
mindful of the price which their country had had to pay 
because of its economic exploitation by Germany, and 
they were determined not to permit another European 
Power to succeed to the position which Germany had 
left vacant. Friction developed, therefore, as soon as 
concessions came up for consideration. The French 
delegation asked for the incorporation in the treaty of 
provisions confirming all concessions to Allied nationals 
whether granted by the old Ottoman Government before 
the War, or by the Constantinople Government after the 
armistice, or by mandatory powers in territory subse¬ 
quently evacuated (as in Cilicia, Smyrna, and Adalia). 
The Turks objected that they were not aware of the 
nature, the number and extent, or the beneficiaries of the 
concessions coming within the last two categories; con¬ 
firmation of such would have to be the subject of in¬ 
dependent investigation and negotiation, for the Turks 
would not sign any blank checks at Lausanne. They 
doubted whether they could accept the financial burden 
which would be involved in validating concessions granted 
by the Sultan’s Government before the War, especially 
if the National Assembly was to be obliged to honor Ot¬ 
toman pre-War debts in full. In any case, the Turkish 
delegates insisted, no concessions would be confirmed if 
they in any way limited the sovereignty of Turkey or 
infringed upon its financial and administrative integrity. 
Between the French and Turkish views was a chasm 
which it would be difficult, indeed, to bridge. The French 
stood upon the rock of the old imperialism; the Turks 
were fortified in their new nationalism. The French were 
seeking to intrench certain important vested interests; the 
Turks were striving to preserve a precious independence, 
recently won at great price. 

In these circumstances, it was to be expected that the 


332 


THE BAGDAD RAILWAY 


British and the Turks should seek to effect an under¬ 
standing. The claims of Great Britain, it appeared, were 
more easily reconcilable with the Turkish program than 
were the claims of France. Concessions obtained by 
British nationals between 1910 and 1914 were largely in 
areas detached from Turkey during the War—chiefly in 
Mesopotamia—whereas many of the most important 
French concessions were in Anatolia, the stronghold of 
the Turkish Nationalists. 29 To Great Britain, therefore, 
it was a matter of comparative indifference whether all 
concessions within Turkey were specifically confirmed; 
to France it was a matter of the utmost importance. Ac¬ 
cording to the proposed Lausanne treaty the Turkish 
Government was to expropriate the former German rail¬ 
ways in Turkey, with a view to incorporating them into a 
state-owned system, and was to pay therefor to the 
Financial Commission, on reparations account, a sum to 
be fixed by an arbitrator appointed by the League of 
Nations. 30 It suited British interests thus to prevent a 
rival Power from obtaining control of the former Bag¬ 
dad line; it suited French interests not at all to be de¬ 
prived of a considerable share in a highly important 
enterprise. In the settlement of questions regarding the 
Ottoman Public Debt, likewise, the French were more 
obdurate than the British. 

In the closing days of the conference, the question of 
Mosul and its oilfields—the last question which stood in 
the way of an Anglo-Turkish agreement—was tem¬ 
porarily settled by a decision to make it the subject of 
“direct and friendly negotiations between the two inter¬ 
ested Powers.” But no agreement was possible between 
Turkey and France on concessions and capitulations. 
When the first Lausanne Conference broke up, therefore, 
it was because of the determination of the Turks not to 
accept economic, financial, and judicial clauses which they 


NEW STRUGGLE FOR BAGDAD RAILWAY 333 

believed menaced their independence. “The treaty,” said 
Ismet Pasha, head of the Turkish delegation, “would 
strangle Turkey economically. I refuse to accept eco¬ 
nomic slavery for my country, and the demands of the 
Allies remove all possibility of economic rehabilitation 
and kill all our hopes.” On the other hand, the refusal 
of the Turks to sign was characterized by the chief of 
the French delegates as “a crime.” 31 

During the interim between the first and second Lau¬ 
sanne conferences French prestige in the Near East was 
dealt some severe blows. The Turkish press attacked 
the French Government for having insisted upon con¬ 
cessions and capitulations which were designed to keep 
Turkey under foreign domination in the interest of bond¬ 
holders and promoters. Such conduct, it was pointed 
out, was altogether inconsistent with the terms of the 
Angora Treaty by which France agreed “to make every 
effort to settle in a spirit of cordial agreement all ques¬ 
tions relating to the independence and sovereignty of 
Turkey.” 32 In the National Assembly hostility to 
French claims was so pronounced that no further action 
was taken toward the ratification of the Angora Treaty— 
and without such ratification the French title to certain 
sections of the Bagdad Railway would be invalid. The 
Turkish army on the Syrian frontier was reenforced 
for the purpose of bringing home to France the deter¬ 
mination of the Angora Government to tolerate no foreign 
interference in its domestic affairs. The situation in 
Syria became so serious that M. Poincare saw fit to 
despatch to Beirut one of Marshal Foch’s right-hand men, 
General Weygand, as commander-in-chief in Syria. 

The breach between France and Turkey was widened 
when, on April 10, 1923, the Angora Government 
awarded to an American syndicate headed by Admiral 
Colby M. Chester, a retired officer of the United States 


334 


THE BAGDAD RAILWAY 


Navy, concessions for almost three thousand miles of 
railway, together with valuable rights to the exploitation 
of the mineral resources of Anatolia. 33 The Chester 
concessions conflicted with certain French claims which 
had been under discussion at the first Lausanne Con¬ 
ference : the concession for a Black Sea railway sys¬ 
tem, which had been conferred upon French capitalists in 
1913; and rights to the Arghana copper mines, to which a 
French group had been given a kind of priority under the 
Angora Treaty of 1921. 34 In part, at least, the award 
of the Chester concessions at this particular time was a 
shrewd political move on the part of the Nationalist Gov¬ 
ernment. It was designed to serve notice on France that 
no treaty would be acceptable to Turkey which would 
require complete confirmation of pre-War concessions; 
from this decision there could be no departure without 
infringing upon American rights and without recognizing 
the acts of a former Sultan as superior to acts of the 
new government of Turkey. It was intended, also, to 
win for the Turks a measure of American diplomatic 
support. That the French Government understood the 
implications of the Chester concessions is evidenced by 
the fact that the Foreign Office despatched to Angora a 
note which characterized the award as “a deliberately 
unfriendly act, of a nature to influence adversely the com¬ 
ing negotiations at Lausanne.” 35 

When the second Lausanne Conference convened on 
April 22, 1923, therefore, it was France, not Great Bri¬ 
tain, which was on the defensive. And the French posi¬ 
tion became steadily worse, rather than better. On May 
15, it was announced that a syndicate of British banks 
had purchased a controlling interest in the Bank fur 
orientalischen Eisenbahnen, of Zurich, the Deutsche 
Bank's holding company for the Anatolian and Bagdad 
Railway Companies. Ismet Pasha, it was said, was kept 


NEW STRUGGLE FOR BAGDAD RAILWAY 335 

fully informed of the British plans and expressed his 
pleasure at the consummation of the transaction. Thus, 
after twenty years of diplomatic bargaining, British im¬ 
perialists had won possession of the “short cut to 
India” ! 36 Should Great Britain succeed in establishing 
her point that the Bank fur orientalischen Eisenbahnen 
is a neutral Swiss, rather than enemy German, corpora¬ 
tion and therefore exempt from seizure under the repara¬ 
tions provisions of the Treaty of Versailles; and should 
the Chester concessions be recognized as superseding the 
rights of the Black Sea Railways, French interests in 
the Levant will face a powerful Anglo-American compe¬ 
tition which it will be very difficult for them to combat 
with any degree of success. 37 And the power of the 
French Government is so heavily invested in the Ruhr 
occupation that it is doubtful if it can do anything at 
all to coerce the Turks into full recognition of French 
claims. 

Kaleidoscopic indeed have been the changes in the 
Near East since the outbreak of the Great War in 1914. 
The economic and political power of Germany in Anatolia, 
Syria, and Mesopotamia has been completely destroyed. 
The Ottoman Empire has disappeared, and in its place 
has risen a republican Nationalist Turkey. Tsarist Rus¬ 
sia, with its consuming desire for aggrandizement in the 
Caucasus, in Asia Minor, and at the Straits, has given 
way to a proletarian Russia which foreswears imperialist 
ambition. Italy, which sought to transform the Adriatic 
and the ^Egean into Italian lakes, has finally been com¬ 
pelled to recognize that she assumed imperial liabilities 
out of all proportion to her economic resources. France, 
after achieving a temporary victory in the New Turkey, 
has had to surrender her position to more powerful com¬ 
petitors. But Great Britain has emerged from the conflict 
in all her glory. She has obtained possession of another 


336 


THE BAGDAD RAILWAY 


highway to the East. Alongside the Suez Canal, in the 
collection of British imperial jewels, will be placed the 
Bagdad Railway; alongside of Malta and Gibraltar and 
Cyprus must be placed Jerusalem and Basra and Bagdad. 

No less remarkable than all these changes, however, is 
the entry of American interests into the tangled problem 
of the Near East. 

America Embarks upon an Uncharted Sea 

The Great War was accompanied by a definite growth 
of American prestige in the Near East. After the entry 
of Turkey into the war against the Allied Powers, Ameri¬ 
can schools and missions were left practically a free 
hand in the Ottoman Empire; and inasmuch as the 
United States did not declare war against Turkey, Ameri¬ 
can institutions were not disturbed even after 1917. 
Carrying on their work under the most trying circum¬ 
stances, these educational and philanthropic enterprises 
established a still greater reputation than they formerly 
possessed for efficient and disinterested service. In con¬ 
sequence, an American official mission to the Near East 
in 1919 was able to report that the moral influence of the 
United States in that region of the world was greater 
than that of any other Power. President Wilson was 
looked upon as the champion of small nations and op¬ 
pressed peoples. Americans were considered to be char¬ 
itable and generous to a fault. The United States was 
hailed as the only nation which had entered the war for 
unselfish purposes. 38 

Since the armistice of 1918 events have not materi¬ 
ally decreased the prestige which the War built up. 
“From Adrianople to Amritsar, and from Tiflis to Aden, 
America is considered a friend. It has become a tradi¬ 
tion in the Near East to interpret every action of the 


NEW STRUGGLE FOR BAGDAD RAILWAY 


337 


European Powers as an attempt at political domination. 
America is the only power considered strong enough to 
provide the Orient with the capital and expert knowl¬ 
edge for its industrial development, without aiming at 
more than a legitimate profit. The Oriental feels that 
he needs cooperation with the West; but he is anxious 
to restrict that cooperation to the economic field. And 
he considers the United States the only power which 
would replace Europe’s political ambitions by a sound, 
matter-of-fact, and sincere economic policy.” 39 

During the Great War the economic situation of the 
United States underwent certain fundamental changes 
which seem to forecast increasing American interest in 
imperialism. Before the War, America was practically 
self-sufficient in raw materials; its export trade was com¬ 
posed very largely of foodstuffs and raw materials which 
found a ready market in the great industrial nations of 
Europe; financially, it was a debtor, not a creditor, nation. 
The enormous industrial expansion of the United States 
during the Great War, however, has changed these con¬ 
ditions. Raw materials have become an increasingly 
greater proportion of the nation’s import trade, and 
American business men are becoming concerned about 
foreign control of certain essential commodities such as 
rubber, nitrates, chrome, and petroleum. American ex¬ 
port trade has experienced an unparalleled period of ex¬ 
pansion, and American manufactured articles are com¬ 
peting in world markets which formerly were the ex¬ 
clusive preserves of European nations. Furthermore, the 
export of American capital has almost kept pace with the 
export of American goods, so that by 1920 the United 
States had taken its place alongside Great Britain and 
France as one of the great creditor nations of the world. 
As time goes on American business will be reaching out 
over the world for a fair share of the earth’s resources 


338 


THE BAGDAD RAILWAY 


in raw materials, for new markets capable of develop¬ 
ment, and for opportunities for the profitable investment 
of capital. 40 

These new tendencies were quickly reflected in Ameri¬ 
can relations with the Near East. As early as the spring 
of 1920 the Government of the United States was en¬ 
gaged in a lengthy correspondence with His Britannic 
Majesty’s Government regarding the right of American 
capital to participate in the exploitation of the oil re¬ 
sources of Mesopotamia. 41 About the same time the 
Guaranty Trust Company of New York—the second 
largest bank in the United States—established a branch 
in Constantinople and proceeded to inform American 
business men regarding the opportunities for commercial 
expansion in the Near East. In a booklet entitled Trad¬ 
ing with the Near East—Present Conditions and Future 
Prospects, the bank had this to say: 

“The establishing of a Constantinople branch of the Guaranty 
Trust Company of New York brings forcibly to mind the grow¬ 
ing importance of the Near East to American foreign trade. 
Up to the present time American business in Constantinople has 
been seriously handicapped by the absence of American banking 
facilities. Our traders were forced to rely on British, French, or 
other foreign banks for their financial transactions. This was 
not only inconvenient, but it was devoid of that business secrecy 
which is so necessary in exploiting new fields. 

“Before the war merchandise from the United States was a 
negligible factor in the business life of Constantinople, and a 
vessel flying the Stars and Stripes was a rare sight. Today one 
will find four or five American liners in the Golden Horn at all 
times. . . . Today a dozen important American corporations have 
permanent offices there, and many other American concerns are 
represented by local agents. 

“The future possibilities of imports from and exports to the 
Eastern Mediterranean, the Sea of Marmora, and the Black Sea 
ports from the United States are of almost unbelievable pro¬ 
portions. These entire sections must be fed, clothed, and largely 
rehabilitated. Roads, ports, railways, and public works of all 


NEW STRUGGLE FOR BAGDAD RAILWAY 339 

kinds are needed everywhere. The merchants of the Near East 
have valuable raw products to send us in exchange for the manu¬ 
factured goods which they so urgently need.” 

This estimate of the situation was confirmed by the 
American Chamber of Commerce for the Levant when, 
in urging upon the Department of State the vigorous de¬ 
fence of the “open door” in Turkey, it said: “The op¬ 
portunities for the expansion of American interests in 
the Near East are practically unlimited, provided there is 
a fair field open for individual enterprise. ... In fact, 
with the conclusion of peace, there is the economic struc¬ 
ture of an empire to be developed.” 42 

The rapid development of American economic inter¬ 
ests in Turkey can be most effectively presented by refer¬ 
ence to the trade statistics. American exports to Turkey 
at the opening of the twentieth century amounted to only 
$50,000. In 1913 they had risen to $3,500,000. But be¬ 
tween 1913 and 1920 they showed a phenomenal increase 
of over twelve hundred per cent, reaching the sum of 
$42,200,000. Nor 'was this trade one sided, for during 
the period 1913-1920, American imports from Turkey 
increased from $22,100,000 to $39,6oo,ooo. 43 

The Chester concessions are another important step in 
the development of a new American policy in the Near 
East. They provide for the construction by the Ottoman- 
American Development Company—a Turkish corporation 
owned and administered by Americans—of approximately 
2800 miles of railways, of which the following are the 
most important: 

1. An extension of the old Anatolian Railway from 
Angora to Sivas, with a branch to the port of Samsun, 
on the Black Sea. 

2. A line from Sivas to Erzerum and on to the Per¬ 
sian and Russian frontiers, with branches to the Black 
Sea ports of Tireboli and Trebizond. 










NEW STRUGGLE FOR BAGDAD RAILWAY 


34i 


3. A line from Oulu Kishla, on the Bagdad Railway, 
to Sivas via Kaisarieh. 

4. A trans-Armenian railway from Sivas to Kharput, 
Arghana, Diarbekr, Mosul, and Suleimanieh, including 
branches to Bitlis and Van. 

5. A railway from Kharput to Youmourtalik, a port 
on the Gulf of Alexandretta. 

No more elaborate project for railway construction in 
Asiatic Turkey has ever been incorporated in a definitive 
concession. That it should be entrusted to American pro¬ 
moters and American engineers is one of the most signifi¬ 
cant developments in the long and involved history of the 
Eastern Question. 

But the Chester concessions do not stop at railway con¬ 
struction alone. As in the case of the Bagdad Railway, 
the Turkish Government is obliged to offer the financiers 
powerful inducements to the investment of capital in rail¬ 
way enterprises which, in themselves, may be unremunera- 
tive for a time. The German promoters of the Bagdad 
Railway obtained a kilometric guarantee, or subsidy; the 
American promoters of the Chester lines are granted ex¬ 
clusive rights to the exploitation of all mineral resources, 
including oil, lying within a zone of twenty kilometres on 
each side of the railway lines. The Bagdad Railway 
mortgaged the revenues of Imperial Turkey; the Chester 
concessions mortgage the natural resources of Nationalist 
Turkey. The Ottoman-American Development Company, 
furthermore, is authorized to carry out important enter¬ 
prises subsidiary to the construction of the railway lines 
and the exploitation of the mines aforementioned. It may, 
for example, lay such pipe lines as are necessary to the 
proper development of the petroleum wells lying within its 
zone of operations. It is permitted to utilize water-power 
along the line of its railways and to instal hydro-electric 


342 


THE BAGDAD RAILWAY 


stations for the service of its mines, ports, or railways. 
It is required to construct elaborate port and terminal 
facilities at Samsun, on the Black Sea, and at Youmour- 
talik, on the Gulf of Alexandretta. 

There are other respects in which the terms of the 
Chester grant are strikingly similar to those of the Bagdad 
Railway concession of March 5, 1903. 44 Lands owned by 
the Turkish Government and needed for right-of-way, 
terminal facilities, or exploitation of mineral resources are 
transferred to the Ottoman-American Development Com¬ 
pany, free of charge, for the period of the concession 
(ninety-nine years). Public lands required for construc¬ 
tion purposes—including sand-pits, gravel-pits, and quar¬ 
ries—may be utilized without rental, and wood and timber 
may be cut from State-owned forests without compensa¬ 
tion. As public utilities, the Chester enterprises are 
granted full rights of expropriation of such privately 
owned land as may be necessary for purposes of construc¬ 
tion or operation. Like the Deutsche Bank, the Ottoman- 
American Development Company is granted sweeping 
exemption from taxation, as follows: “The materials, ma¬ 
chines, coal, and other commodities required for the con¬ 
struction operations of the Company, whether purchased 
in Turkey or imported from abroad, shall be exempt from 
all customs duties or other tax. The coal imported for the 
operation of the [railway] lines shall be exempt from 
customs duties for a period of twenty years, dating from 
the ratification of the present agreement. For the entire 
duration of the concession the lines and ports constructed 
by the Company, as well as its capital and revenues, shall 
be exempt from all imposts.” 45 

From the Turkish point of view, the Chester concessions 
may be justified on the grounds that the new railways will 
bring political stability to Anatolia 46 and will initiate an 
era of unprecedented economic progress. From the point 


NEW STRUGGLE FOR BAGDAD RAILWAY 343 

of view of those American interests which believe in the 
stimulation of foreign trade, likewise, the Chester project 
has much to commend it. Exploitation of the oilfields of 
the vilayets of Erzerum, Bitlis, Van, and Mosul, and the 
development of the mineral resources of Armenia—includ¬ 
ing the valuable Arghana copper mines—will provide rich 
sources of supply of raw materials. In the construction 
of railways, ports, and pipe lines there will be a consider¬ 
able demand for American steel products. Economic de¬ 
velopment of the vast region through which the new rail¬ 
ways will pass promises to furnish a market for American 
products, such as agricultural machinery, and to offer 
ample opportunity for the profitable investment of Ameri¬ 
can capital. The Chester project may well become an 
imperial enterprise of the first rank. 

With the exception of the temporary advantage which 
they hoped to gain at the second Lausanne Conference, the 
Turkish Government wished no political importance to be 
attached to the Chester concessions. As Abdul Hamid had 
awarded the Anatolian and Bagdad Railway concessions to 
a German company because he believed Germans would be 
less likely to associate political aims with their economic 
privileges, so the Government of the National Assembly 
has awarded the Chester concessions to an American syn¬ 
dicate because Turkish Nationalists are convinced that 
Americans have no political interests in Turkey. This was 
made clear by Dr. I. Fouad Bey, a member of the National 
Assembly, in a semi-official visit to the United States dur¬ 
ing April, 1923. “We Turks wish to develop our coun¬ 
try, M he said. “We need foreign cooperation to develop 
it. We cannot do without this cooperation. Now, there 
are two kinds of foreign cooperation. There is the for¬ 
eign cooperation that is coupled with foreign political 
domination—cooperation that brings profit only to the 
foreign investor. We have had enough of that kind. 


344 


THE BAGDAD RAILWAY 


There is another kind of cooperation—the kind we con¬ 
ceive the Chester project and other American enterprises 
to be. This kind of cooperation is a business enterprise 
and has no imperialistic aim. It is a form of cooperation 
designed to profit both America and Turkey, and not to 
invade Turkish sovereignty and Turkish political interests 
in any way. That is why we prefer American cooperation. 
That is why the Grand National Assembly at Angora is 
prepared to welcome American capital with open arms and 
secure it in all its rights.” 47 

These sentiments found a ready echo among American 
merchants. At a dinner given in honor of Dr. Fouad Bey 
by the American Federated Chambers of Commerce for 
the Near East, one of the speakers said: “Turkey, in our 
opinion, is destined to have a magnificent future. It is on 
the threshold of a new and great era. Its extraordinary 
resources, amazingly rich, are practically untouched. 
Although in remote ages of antiquity these vast regions 
played a great role in history, they have for many cen¬ 
turies lain practically fallow. The tools, appliances, ma¬ 
chinery and methods which have been so highly perfected 
in the United States are appropriate to and will be needed 
for the development of this marvelous latent wealth. Our 

capital likewise can be very helpful. The members of our 

« 

Chamber of Commerce have a keen interest in the further¬ 
ance of trade relations between Turkey and the United 
States. We want both to increase the imports of its ra,w 
materials into our country and to stimulate the export of 
our manufactured articles to Turkey. We are inspired by 
no political aims. We seek no annexation of territory. 
We desire no exclusive privileges. Our motto, if we had 
one, would be ‘A fair field and no favors/ In the develop¬ 
ment of commercial relations with Turkey, in seeking the 
investment of our capital there, we ask for nothing more 
than an open door.” 48 


345 


NEW STRUGGLE FOR BAGDAD RAILWAY 

The American press, likewise, is in accord with a policy 
of governmental non-intervention in the ramifications of 
the Chester project. The following editorial from the new 
York World of April 23, 1923, is perhaps representative: 

“There is no reason why the State Department should make 
itself the attorney for or the promoter of the Chester business 
enterprises. If the Angora Government has granted privileges 
to the Admiral’s company, then the Admiral’s business is with 
Angora and not with Washington. 

“Certainly the American people have no more interest in tak¬ 
ing up the Chester concessions diplomatically than they would 
have if the Admiral were proposing to open a candy store in 
Piccadilly, a dressmaking establishment in the Rue de la Paix, 
or a beauty parlor on the Riviera. If the Admiral and his 
friends wish to invest money in Turkey, they no doubt know 
what they are doing. They will expect profits commensurate 
with the risks, and they should not expect the United States 
Government, which will enjoy none of the profits, to insure them 
against the risks.” 

It is difficult, nevertheless, to see how the Chester con¬ 
cessions, and their affiliated enterprises can be kept scrupu¬ 
lously free from political complications. The French 
Government, in defence of the interests of its nationals, 
has announced semi-officially that American support of the 
concessions might lead to “a diplomatic incident of the 
first importance.” 49 Furthermore, the United States 
Navy is said to be vitally interested in the Chester project. 
The oilfields to which Admiral Chester’s Ottoman-Ameri- 
can Development Company obtain rights of exploitation 
may prove to be important sources of fuel supply to 
American destroyers operating in the Mediterranean— 
Mr. Denby, Secretary of the Navy, said apropos of the 
concessions that the Navy “is always concerned with the 
possibility of oil supplies.” 50 Furthermore, an American- 
built port at Youmourtalik, on the Gulf of Alexandretta, 
might conceivably be utilized as an American naval base. 


346 


THE BAGDAD RAILWAY 


Such a station, less than 150 miles from Cyprus and less 
than 400 miles from the Suez Canal, could hardly be ex¬ 
pected to increase the British sense of security in the 
Eastern Mediterranean. 

The American Navy has already been very active in the 
Near East. “Soon after the armistice, Rear Admiral 
Bristol was sent to Constantinople to command the small 
American naval forces there. A large part of his efforts 
was immediately devoted to the promotion of American 
business in that unsettled region, including the countries 
bordering on the Black Sea. He soon established for him¬ 
self such an influential position by sheer force of charac¬ 
ter and by his intelligent grasp of both the political and 
economic situations that he was appointed high commis¬ 
sioner by the State Department. 

“Early in 1919 several American destroyers were or¬ 
dered to Constantinople for duty in the Near East. Al¬ 
though these destroyers are good fighting ships, it costs 
some $4,000,000 a year to maintain them on this particular 
duty, which does not train the crews for use in battle. . . . 
The possible development of the economic resources of this 
part of the world was carefully investigated by representa¬ 
tives of American commercial interests. These representa¬ 
tives were given every assistance by the Navy, transporta¬ 
tion furnished them to various places, and all information 
of commercial activities obtained by naval officers in their 
frequent trips around the Black Sea given them. The 
competition for trade in this part of the world is very keen, 
the various European countries using every means at their 
disposal to obtain preferential rates. The Navy not only 
assists our commercial firms to obtain business, but when 
business opportunities present themselves, American firms 
are notified and given full information on the subject. 
One destroyer is kept continuously at Samsun, Turkey, 
to look after the American tobacco interests at that port. 


NEW STRUGGLE FOR BAGDAD RAILWAY 34; 

. . . The present opportunities for development of Ameri¬ 
can commerce in the Near East are very great, and its 
permanent success will depend largely upon the continued 
influence of the Navy in that region.” 51 This is the situa¬ 
tion as diagnosed by the Navy Department itself. 

“With the assistance of a small force of destroyers based 
on Constantinople,” according to an instructor in the 
United States Naval Academy, “our commercial repre¬ 
sentatives are establishing themselves firmly in a trade 
which means millions of dollars to the farmers of the 
American Middle West. By utilizing the wireless of de¬ 
stroyers in Turkish ports, at Durazzo, and elsewhere, com¬ 
mercial messages have been put through without delay. 
. . . Destroyers are entering Turkish ports with ‘drum¬ 
mers’ as regular passengers, and their fantails piled high 
with American samples. An American destroyer has made 
a special trip at thirty knots to get American oil prospec¬ 
tors into a newly opened field.” Here is “dollar diplo¬ 
macy” with a vengeance! “If this continues, we shall 
cease to take a purely academic interest in the naval prob¬ 
lems of the Near East. These problems are concerned 
with the protection of commerce, the control of narrow 
places in the Mediterranean waterways, and the naval 
forces which the interested nations can bring to bear. 
They cannot be discussed without constant reference to 
political and commercial aims.” 52 

Americans would do well to take stock of this Near 
Eastern situation. Mustapha Kemal Pasha invites the 
participation of American capital in railway construction 
in Anatolia for substantially the same reasons which 
prompted Abdul Hamid to award the Bagdad Railway 
concession to German bankers. In 1888, Abdul Hamid 
considered Germany economically powerful but politically 
disinterested. Today, Mustapha Kemal Pasha believes 
that American promoters, engineers, and industrialists 


34§ 


THE BAGDAD RAILWAY 


possess the resources and the technical skill which are 
required to develop and modernize Asia Minor. And, 
from the Turkish point of view, the political record of the 
United States in the Near East is a good record. America 
never has annexed Ottoman territory or staked out spheres 
of interest on Turkish soil; America has not participated 
in the Ottoman Public Debt Administration; America has 
few Mohammedan subjects and therefore is not fearful 
of the political strength of Pan-Islamism ; America did not 
declare war on Turkey during the European struggle; 
America was not a party to the hated treaty of Sevres. 
America alone among the Western Powers seems capable 
of becoming a sincere and disinterested friend of Turkey. 53 
The avowed foreign policies of the United States appear 
to confirm the opinion of the Turks that Americans can 
be depended upon not to infringe upon Turkish sov¬ 
ereignty. America must be kept scrupulously free from 
all “foreign entanglements”; therefore an American man¬ 
date for Armenia has been firmly declined. Splendid iso¬ 
lation is declared to be the fundamental American princi¬ 
ple in international affairs. 

The political theory of isolation, however, is not alto¬ 
gether in harmony with the economic fact of American 
world power. The enormous expansion of American 
commercial and financial interests during and since the 
Great War brings the United States face to face with new, 
difficult, and complicated international problems. Ameri¬ 
can business men will be increasingly interested in the 
backward countries of the world, in which they can pur¬ 
chase raw materials, to which they can sell their finished 
products, and in which they can invest their capital. 
American financiers, manufacturers, and merchants will 
look to their government for assistance in the extension of 
foreign markets and for protection in their foreign invest¬ 
ments. Already there is grave danger that the United 


NEW STRUGGLE FOR BAGDAD RAILWAY 


349 


States may “plunge into national competitive imperialism, 
with all its profits and dangers, following its financiers 
wherever they may lead.” 54 

The situation is not unlike that which faced the German 
Empire in 1888. When the Deutsche Bank initiated its 
Anatolian railway enterprises, it inquired of the German 
Government whether it might expect protection for its 
investments in Turkey. Bismarck—who desired to avoid 
imperialistic entanglements and to limit German political 
interests, as far as possible, to the continent of Europe— 
replied with a warning that the risk involved “must be 
assumed exclusively by the entrepreneurs” and that the 
Bank must not count upon the support of the German 
Government in “precarious enterprises in foreign coun- 
tries.” But Bismarck’s policy did not take full cognizance 
of the phenomenal industrial and commercial expansion of 
the German Empire, whose nationals were acquiring eco¬ 
nomic interests in Asia and in Africa and on the Seven 
Seas. William II was more sensitive than Bismarck to the 
demands of German industrial, commercial, and financial 
interests that they be granted active governmental support 
and protection abroad. Bismarck tolerated German enter¬ 
prises in Turkey; William II sponsored them. It was 
under William II, not under Bismarck, that Germany defi¬ 
nitely entered the arena of imperial competition. 55 

The development of American interests in Turkey puts 
the Government of the United States to a test of states¬ 
manship. The temptations will be numerous to lend gov¬ 
ernmental assistance to American business men against 
their European competitors; to utilize the new American 
economic position in Turkey for the acquisition of politi¬ 
cal influence; to use diplomatic pressure in securing addi¬ 
tional commercial and financial opportunities; to emphasize 
the economic, at the expense of the moral, factors in Near 
Eastern affairs. To yield to these temptations will be to 


350 


THE BAGDAD RAILWAY 


destroy the great prestige which America now possesses in 
the Levant by reason of disinterested social and educa¬ 
tional service. To yield will be to forfeit the trust which 
Turkish nationalists have put in American hands. To 
yield will be to intrench the system of economic imperial¬ 
ism which has been the curse of the Near East for half 
a century. To yield will be to involve the United States 
in foreign entanglements more portentous than those con¬ 
nected with the League of Nations, or the International 
Court of Justice, or any other plan which has yet been 
suggested for American participation in the reconstruction 
of a devastated Europe and a turbulent Asia. 

The Chester concessions may be either promise or 
menace. They will give promise of a new era in the Near 
East insofar as they contribute to the development and the 
prosperity of Asia Minor, without infringing upon the 
integrity and sovereignty of democratic Turkey, and with¬ 
out involving the Government of the United States in 
serious diplomatic controversies with other Great Powers. 
They will be a menace—to Turkey, to the United States, 
and to the peace of the world—if, unhappily, they should 
lead republican America in the footsteps of imperial 
Germany. 

BIBLIOGRAPHICAL AND EXPLANATORY NOTES 

1 Mufty-Zade Zia Bey, “How the Turks Feel,” in Asia, Volume 
XXII (1922), p. 857. 

““Declaration of the Rights of the Toiling and Exploited 
People,” Article III. Available in English translation in Inter¬ 
national Conciliation, No. 136 (New York, 1919). 

8 Supra, Chapter VII. 

‘The text of the Russo-Turkish Treaty of March 16, 1921, is 
given as an appendix to an article by A. Nazaroff, “Russia’s 
Treaty with Turkey,” in Current History, Volume XVII (1922), 
pp. 276-279. 

6 Bowman, op. cit., p. 398. 

a Cf. supra, pp. 202-203. Professor Toynbee now speaks of this 
feature of the Entente in terms of contempt: “Its direct motive 


NEW STRUGGLE FOR BAGDAD RAILWAY 351 


was covetousness, and it rested locally on nothing more substantial 
than the precarious honor among thieves who find their business 
threatened by a vigorous and talented competitor. Some of the 
thieves, at any rate, never got out of the habit of picking their 
temporary partners’ pockets.” Op. cit., p. 46. 

'Ibid., pp. 45-46. 

8 It seems to be established thaj Mr. Lloyd George compelled a 
readjustment of the terms of the Sykes-Picot Treaty by threaten¬ 
ing M. Clemenceau with a complete exposure and repudiation of 
all of the secret treaties. Cf. Baker, op. cit., Volume I, pp. 70-72. 

8 See Minutes of the Council of Four, March 20, 1919, reported 
in full by Baker, op. cit., Volume III, Document No. 1. 

✓ 10 Regarding the claims of the Turkish Petroleum Company, cf. 

supra, p. 261. 

11 Parliamentary Papers, No. Cmd. 675 (1920). Cf., also, the 
“Franco-British Convention of December 23, 1920, on Certain 
Points Connected with the Mandates for Syria, the Lebanon, 
Palestine, and Mesopotamia,” Parliamentary Papers, No. Cmd. 
1195 (1921). For a general discussion of the oil situation, see: 
H. Berenger, La politique du petrole (Paris, 1920) ; F. Delaisi, Le 
petrole — La politique de la production (Paris, 1921); A. Apostol 
and A. Michelson, La lutte pour le petrole (Paris, 1922). 

13 Cf. supra, Chapter X, Note 18. 

18 Supra, pp. 301-302. 

14 Interesting sidelights on these points will be found in the 
correspondence between the French and British Governments re¬ 
garding the Angora Treaty of October 20, 1921, Parliamentary 
Papers, No. Cmd. 1571, Turkey No. 1 (1922). Cf, t also, 
Toynbee, op. cit., Chapter III, “Greece and Turkey in the Vicious 
Circle”; Jean Lescure, “Faut-il detruire la Turquie?” in Revue 
politique et parlementaire, Volume 103 (1920), pp. 42-48; “Where 
Diplomacy Failed,” The Daily Telegraph (London), September 
19, 1922. 

15 M. de Montille to the Marquess Curzon of Kedleston, No¬ 
vember 17, 1921, in the official correspondence cited in Note 14. 

18 Cf. a statement by M. Briand regarding the purposes and the 
scope of the agreement, Journal ofhciel, Debats parlementaires, 
Chambre des deputes, March 16, 1921, pp. 1272-1273. The text of 
the agreement is available in Current History, Volume XIV 
(1921), pp. 203-204, and in the Contemporary Review, Volume 

119 (1921), pp. 677-679. 

17 Regarding the Heraclea coal mines cf. supra, p. 14. During 
the War the mines were operated by Hugo Stinnes. 

"For the text of the Turco-Italian treaty see UEurope Nou- 
velle (Paris), May 28, 1921, or The Nation, Volume 113 (New 
York, 1921), p. 214. The New York Times, April 13, 1921, con- 


352 


THE BAGDAD RAILWAY 


tains a good summary of the treaty and the circumstances of its 
negotiation. 

“The text of the Angora Treaty is given in Parliamentary 
Papers, No. Cmd. 1556, Turkey No. 2 (1921). It has been re¬ 
printed in Current History, January, 1922. For a statement by 
M. Briand regarding the purposes and scope of the treaty, cf. 
Journal othciel, Debats parlementaires, Senat, October 28, 1921, 
pp. 818-819. 

"Aleppo remained within the French mandate for Syria, so 
that for a time—until the Turks construct a substitute line— 
through trains will have to pass through French territory for a 
short distance. Guarantees against interruption of either military 
or commercial traffic were exacted by the Turks, however. In 
addition, Turkey was guaranteed full use of the port of Alex- 
andretta on a basis of absolute equality with Syria. 

21 Most of the supplementary economic concessions are provided 
for in a covering letter of Yussuf Kemal Bey and in an exchange 
of notes which coincided with the signature of the treaty. These 
were kept absolutely secret until December, when their contents 
were made known to the British Government. 

22 Supra, p. 83. 

23 The italics are mine. Discrimination against British trade 
from Mosul to Alexandretta, for example, might be used to force 
Great Britain to abandon many of her claims in northern Meso¬ 
potamia. 

2 *The Times (London), August 2, 1922; Manchester Guardian 
Commercial, August 31, 1922; Chicago Tribune, Paris edition, 
August 21, 1922. 

25 For the text of the correspondence, cf. Parliamentary Papers, 
No. Cmd. 1571, Turkey No. 1 (1922). 

28 Cf. supra, pp. 301-302. 

27 A not unrepresentative Greek view is the following: 
“Nationalist Turkey became, in a military sense, French territory. 
Political missions, military missions, propaganda missions, finan¬ 
cial missions, found their way from Paris to Angora. The entire 
credit of the French Republic was placed behind Kemal. The 
warships of France and the liners of the Messageries Maritimes 
became Turkish transports, and the French arsenals were placed 
at the disposal of the Turks. Once the ally of Kemal, France 
supported him to the fullest extent of its ability and its resources.” 
A. T. Polyzoides, “The Greek Collapse in Asia Minor,” in Current 
History, Volume XVII (1923), p. 35. 

38 Material regarding the Lausanne Conference is scattered and 
fragmentary. The text of the proposed treaty is to be found in 
L’Europc Nouvelle (Paris), February 24 and March 10, 1923; a 
summary is given in The Times (London), February 1, 1923. The 


NEW STRUGGLE FOR BAGDAD RAILWAY 


353 


newspaper accounts which I have used are those of The New 
York Times, The Times (London), The Manchester Guardian, 
The World (New York), and the Christian Science Monitor 
•(Boston). For reports and editorial comment in weekly period¬ 
icals I have consulted The Near East, L’Europe Nouvelle, Jour¬ 
nal des Debats, The New Statesman (London), The Nation (New 
York). The following magazine articles have proved useful: 
“The Lausanne Conference,” in Current History, Volume XVII 
(1923), pp. 531-537, 743-748, 929-930; Saint-Brice, “De la Ruhr a 
Lausanne,” in Correspondance d’Orient (Paris), February, 1923; 
“The Oriental Labyrinth at Lausanne,” in the Literary Digest, 
April 21, 1923, pp. 19-20; H. Froidevaux, “Les negociations de 
Lausanne et leur suspension,” in L’Asie Frangaise, 33 year, No. 
208 (Paris, 1923), PP- 8-10; J. C. Powell, “Italy at Lausanne,” in 
The New Statesman, Volume XX (1922), pp. 291-292; A. J. 
Toynbee, “The New Status of Turkey,” in the Contemporary 
Review, Volume 123 (1923), pp. 281-289; P. Bruneau, “La ques¬ 
tion de Mossoul,” in L’Europe Nouvelle, February 3, 1923, pp. 
138-140. For some of my information regarding the Lausanne 
Conference I am indebted to Djavid Bey. 

* Cf. supra, Chapters IX and X, ad lib. 

30 Compare with the provisions of the Treaty of Sevres, supra, 
PP- 301-302. 

81 The New York Times, February 5, 1923. 

33 Cf. supra, pp. 324-325. 

33 The Chester concessions will be treated more fully in the 
succeeding pages. 

34 Supra, pp. 245-249, 325-326. It was the Turkish contention 
that the Black Sea concessions were invalid for the following 
reasons: they were negotiated by a government for the acts of 
which the National Assembly assumed no responsibility; they 
never had been ratified by the Turkish Parliament; the French 
bankers had not fulfilled all the conditions upon which the con¬ 
cessions were predicated. 

35 The New York Times, April 12, 1923. 

36 Regarding the Bank fiir orientalischen Eisenbahnen, cf. supra, 
p. 32. Accounts of the purchase by British interests are to be 
found in The New York Times, April 28, May 15 and 16, 1923, 
and The Times (London), May 18, 1923. 

37 The Chester concessions conflict, to a degree, with the rights 
of the British-owned Turkish Petroleum Company ( cf . supra, 
Chapter X) in the vilayet of Mosul. The area in conflict is 
so small, compared to the total of the two concessions, however, 
that it is extremely doubtful if there will be any serious difficulty 
in reaching a satisfactory adjustment. 

38 “Report of the King-Crane Mission to the Near East,” pub- 


354 


THE BAGDAD RAILWAY 


lished as a supplement to the Editor and Publisher, Volume 55 
(New York, 1922), pp. I-XXVIII. Cf., also, “Report of the 
American Military Mission to Armenia,” Senate Document No. 
266, Sixty-sixth Congress, First Session (Washington, 1920). 

* E. J. Bing, “Chester and Turkey, Inc.,” in The New Republic, 
Volume XXXIV (New York, 1923), pp. 290-292. 

40 Cf. E. M. Earle, “The Outlook for American Imperialism,” in 
the Annals of the American Academy of Political and Social 
Science, Volume CVIII (Philadelphia, 1923). 

41 For the text of this correspondence, cf. Parliamentary Papers, 
No. Cmd. 675 (1921). 

a The New York Times, October 29, 1922. 

48 Statistical Abstract of the United States, 1921, passim; “The 
Trade of Turkey During 1920,” Commerce Reports, Special Sup¬ 
plement (Washington, 1921). 

“Compare with the terms of the Bagdad Railway concession, 
supra, pp. 70 - 7 B 77 - 84 . 

45 The text of the Chester concessions—in an English transla¬ 
tion which leaves much to be desired—is to be found in Current 
History, Volume XVIII (1923), pp. 485-489. For an official 
copy of the concessions, with a map, I am indebted to Mr. M. 
Zekeria, Secretary of the Turkish Information Service in New 
York. 

49 The Chester concessions contain the usual provisions for the 
utilization of the railways by the gendarmerie and the military, 
both in time of peace and in time of war. 

4T The World (New York), April 10, 1923. 

48 The remarks are those of Mr. Ernest Filsinger, of the firm 
of Lawrence & Company, exporters. Mr. Filsinger has been good 
enough to supply me with a copy of his speech. 

49 The New York Times, April 12, 1923. 

90 Ibid., April 23, 1923. 

61 The United States Navy as an Industrial Asset (Washington, 
Office of Naval Intelligence, 1923). Cf., also, C. Merz, “Bris¬ 
tol, Quarterdeck Diplomat,” in Our World, December, 1922. 

63 Allen Westcott, “The Struggle for the Mediterranean,” in 
Our World, February, 1923, pp. 11-17. 

63 Cf., supra, pp. 63-65. 

S4 Cf. W. E. Weyl, American World Policies (New York, 1917), 
Chapter V; A. Demangeon, America and the Race for World 
Dominion (Garden City, 1921), a translation of Le Declin de 
VEurope (Paris, 1920). 

68 Supra, pp. 40-42. 


INDEX 


Abdul Hamid, Sultan, 5, 23, 
198; problems of, 9; interest 
in railway construction, 20, 
30; deposition of, 97. 

Adaban Island, 283. 

Adalia, 267, 285, 302, 324. 

Adana, 22, 72. ( See also Mer- 
sina-Adana Railway.) 

Adrianople, 29. 

Afiun Karahissar, 34, 53, 324. 

Agadir crisis, 170, 253. 

Agriculture in Turkey. (See 
Turkey, agricultural condi¬ 
tions.) 

Aidin, 324. (See also Smyrna- 
Aidin Railway.) 

Alashehr, 34. 

Aleppo, 2, 22, 62, 71, 73, 281, 
299. 

Alexandretta, 19, 62, 73, no, 
112, 151. 

Allenby, Field Marshal Sir E. 
H. H., 298-299. 

Alliance Israelite Universelle, 
1 33 - 

Amanus Mountains, 22, 72, 94, 
234, 277, 289; Bagdad Rail¬ 
way tunnels through, 113, 119, 
289. 

Arnara, 286. 

America. (See United States 
of America.) 

American Federated Chambers 
of Commerce for the Near 
East, 344. 

Anatolia, 280, 302, 305; geog¬ 
raphy of, 10; natural re¬ 
sources of, 13-14; railways 
of, 29-30. (See also Ana¬ 
tolian Railway, Smyrna-Cas- 
saba Railway, Smyrna-Aidin 
Railway, Black Sea Railways, 
etc.) 


Anatolian Railway, 34, 53, 61, 
63, 224, 248, 339; concession 
of 1888, 32; concession of 
1893, 33; agreement with 
Smyrna-Cassaba Railway, 59- 
60; board of directors, 85; 
irrigation enterprises, 98, 117; 
economic achievements of, 
230-232; concessions of 1914, 
248-249, 272. 

Andrew, Sir William, 176-177. 

Anglo-French Entente. (See 
Entente Cordiale.) 

Anglo-French rivalry in the 
Near East, 318-329. 

Anglo-German Agreement of 
June 15, 1914, 261-265. 

Anglo-German rivalry, 138, 
179-180, 203. 

Anglo-Japanese Alliance, 204. 

Anglo-Persian Oil Company, 
259, 261, 283, 286. 

Anglo-Russian Agreement 
(1907), 204. 

Anglo-Turkish Agreements 
(1913), 254-258, 263-264. 

Angora, 31, 32, 33, 34, 305, 339. 

Angora Government. (See 
Grand National Assembly.) 

Angora Treaty (October 20, 
1921), 324-325, 333 , 352 . 

Arabs, 9-10, 15, 87, 196, 207, 
282-284, 294, 297, 299, 302, 
305, 320. 

Ardahan, 316. 

Arghana, 246, 340; copper 

mines of, 326, 334, 343. 

Armenia, 2, 9, 44; republic of, 
302, 305; proposed American 
mandate, 348. 

Asia Minor. (See Anatolia.) 

Atlas Line, 107. 

Auguste Victoria, Kaiserin, 132. 


356 


INDEX 


Austria-Hungary, policies in 
Near East, n; railways in 
Turkey, 58; trade with Tur¬ 
key, 105-106; annexation of 
Bosnia-Herzegovina, 218; re¬ 
lations with Germany in Near 
East, 129-130. ( See also 

Drang nach Osten.) 

Backshish , 94. 

Bagdad, 2, 31, 32, 62, 71, 73-74, 
261, 281, 286, 296, 336. 

Bagdad Railway, 3, 7, 21, 34; 
factor in Great War, 4, 172, 
278, 288-289, 291, 299-300; 
strategic importance to Tur¬ 
key, 22, 152-153; mileage, 90; 
construction, 94-95, 113-114, 
289; political importance to 
Germany, 126-131; opponents 
and friends of enterprise in 
Germany, 137-142; economic 
success, 233-234; disposition 
of by Allies, 301; Angora 
Treaty, 325-326; status in 
1922, 326; purchase by Brit¬ 
ish bankers, 334. (See also 
Germany, Great Britain, 
France, Russia.) 

Bagdad Railway Company, in¬ 
corporation of, 70, 92; con¬ 
cession of 1903, 22, 70-75, 
77-84, 219; attempt to inter¬ 
nationalize (1903), 92-93; 

board of directors, 93, 115, 
256, 263; preliminary conces¬ 
sion of 1899, 61-65, 68; finan¬ 
cing concession of 1903, 77, 
91, 93-94, 116; concession of 
1908, 96-97; convention of 
March, 1911, m-112, 228- 
229, 252; Franco-German 

agreement of 1914, 170, 247- 
252; contracts with Lord 
Inchcape, 259-260, 264; agree¬ 
ment with Smyrna-Aidin 
Railway Company, 260, 264; 
proposed liquidation, 301. 

Bagtche tunnel, 289. 

Bahrein Island, 283. 

Balfour, A. J. (Earl Balfour), 
93, 180-185, 202. 


Balfour of Burleigh, Lord, 

117. 

Balkan States, 11, 152; nation¬ 
alism of, 7. 

Balkan Wars, 246-275. 

Ballin, Albert, 141, 281. 

Banditry, 9, 12. 

Bank fiir Handel und Industrie, 
101, 116. 

Bank fiir orientalischen Eisen- 
bahnen, 32, 334. 

Banque d’Orient, 99. 

Barrow, General Sir Edmond, 
282. 

Basra, 2, 19, 62, 74, 255, 263, 
282, 284, 336. 

Bassermann, Herr, 120, 129, 

170, 256. 

Beersheba, 298. 

Beirut, 30, 62, 72, 299. 

Belgium. Railway concessions 
of Belgians in Turkey, 30. 

Berger, Leon, 91, 115. 

Bergmann, Dr. Carl, 260. 

Berthelot, Philippe, 320. 

Bethmann-Hollweg, von, 249. 

Beyens, Baron, 249. 

Bieberstein, Baron Marschall 
von, 43, 55, 170, 218, 254. 

Bismarck, 40-42, 54-55, 349. 

Bitlis, 340. 

Black Sea Basin Agreement, 
65, 149- 

Black Sea Railways, 245-246, 
248-249. 

Boer War, 61, 179, 203. 

Boli, 246. 

Bowles, Gibson, 190, 210. 

Bozanti, 325. 

Breslau (Cruiser), 278, 282. 

Briand, Aristide, 329. 

Brusa, 14. 

Bulgaria, 288, 290. 

Bulgurlu, 94, 96. 

Bulow, Prince von, 48, 135. 


Cadman, Sir John, 321. 
Caillard, Sir Vincent, 31, 32. 
Caliphate, 27, 64, 278-279, 

296. 

Cambon, Jules, 268. 


INDEX 


Cambon, Paul, 225. 
Capitulations, 10-11, 82, 153- 
154, 276, 303-306, 316, 332. 
Carden, Admiral, 282. 

Cassel, Sir Ernest, 209, 220-221, 
225. 

Chamberlain, Austen, 287. 
Chamberlain, Joseph, 67, 178- 
179, 185. 

Cheradame, Andre, 155, 215. 
Chesney, Francis R., 176. 
Chester, Rear Admiral Colby 
M., 15, 333. 

Chester concessions, 334, 339, 
353; compared with Bagdad 
Railway concessions, 340-343; 
political significance of, 350. 
Chrome, 13, 337. 

Churchill, Winston, 282. 

Cilicia, 305, 325-326, 331; 

French mandate for, 302, 325. 
(See also Mersina-Adana 
Railway.) 

Cilician Gates of the Taurus, 

72, 113, 149, 325. 
Cilician-Syrian Railway Com¬ 
pany, 326. 

Clemenceau, Georges, 310, 320, 
35 i. 

Coal, Heraclea mines, 14, 324. 
Colonization, 84, 123-125. 
Combes, Emile, 167. 

Commercial Revolution, 1, 3-4, 

73. (See also Trade routes.) 
Committee of Union and Prog¬ 
ress, 217, 219. 

Constans, M., 60, 155. 
Constantinople, 2, 10, 23, 281, 
302. 

Cotton, 16, 50-51, 294, 297, 326. 
Cox, Sir Percy, 283-284, 286. 
Cranborne, Lord, 69. 

Crawford, Sir Richard, 221. 
Credit Lyonnaise, 158. 

Crewe, Lord, 282. 

Crowe, Sir Eyre, 259. 
Ctesiphon, 287. 

Curzon, Lord, 23, 113, 192, 197- 
198, 199, 212-213, 283, 327. 
Customs duties of Ottoman 
Empire, 95, in, 180, 226-228, 
256, 262. 


357 

Damascus, 12, 21, 30, 62, 72, 
299. 

Damascus-Homs-Aleppo Rail¬ 
way, 34, 246. 

D’Arcy Exploration Company, 
259, 261. 

Dardanelles, 245, 280, 282, 285, 
288-289. 

Dawkins, Sir Clinton, 186. 

Deir, province of, 294. 

Deir es Zor, 248. 

Delamain, General, 283-284. 

Delcasse, Theophile, 66, 68, 

155 - 157 , 168-169. 

DeLesseps, Ferdinand, 177. 

Denby, Charles, 345. 

Deschanel, Paul, 159, 172. 

Dette Publique. (See Ottoman 
Public Debt Administration.) 

Deutsche Bank, 32-33, 36, 99, 
140, 141, 184-185, 261; nego¬ 
tiations of 1899 with Imperial 
Ottoman Bank, 59-60, 155; 
influential position in Ger¬ 
man industry, 100-101; loans 
to Young Turks, 225; nego¬ 
tiations of 1913-1914 with 
Imperial Ottoman Bank, 170, 
247-252. (See also Ana¬ 

tolian Railway, Bagdad Rail¬ 
way Company, etc.) 

Deutsche Levante Linie, 36, 107. 

Deutsche Mittelmeer Levante 
Linie, 108. 

Deutsche Orientbank, 99. 

Deutsche Orient Mission, 132. 

Deutsche Palastina Bank, 37, 
99, 158. 

Deutsche - tiirkische Vereini- 
gung, 281. 

Deutsches Vorderasienkomitee, 
281. 

Deutschtum, das, 135. 

Diarbekr, 12, 14, 31, 73, 246, 
340 . 

Disraeli, Benjamin (Earl of 
Beaconsfield), 3, 178, 215. 

Djavid Bey, 95, 219-220, 224- 
229, 235-236, 247, 275, 278, 

331. 

Djemal Pasha, 278, 285, 298. 

Dodecanese Islands, 267. 


358 


INDEX 


Downing Street, 185, 201, 210, 
254 . 

Drang nach Osten, 51, 123, 129- 
130, 139, 141-M2, 315 - 

Dresdner Bank, 101, 116. 

Eastern Bank, The, 117. 

Egypt, 3, 7 , 21, 195, 201, 278, 
319 . 

El Helif, 96. 

Ellenborough, Lord, 102, 197. 

Entente Cordiale, 188, 203-204, 
3 J 9 - 

Enver Pasha, 275, 278, 285, 297. 

Eregli, 72. 

Erzerum, 12, 246, 303, 339. 

Eski Shehr, 14, 33. 

Euphrates River, 2,74, 81. ( See 
also Lynch Brothers.) 

Euphrates Valley Railway Com¬ 
pany, 176. 

Euphrates & Tigris Steam 
Navigation Company, Ltd. 
{See Lynch Brothers.) 

Falkenhayn, General von, 298- 
299 . 

Fashoda incident, 61, 203. 

Fouad Bey, Dr. I., 343. 

France, 7, 23, 276, 293; French 
railways in Turkey, 30, 34, 
53, 59, 165-166, 245-246, 248- 
249. {See also Smyrna- 
Cassaba Railway, Damascus- 
Homs-Aleppo Railway, etc.) ; 
trade with Turkey, 104-106; 
imperialism, 122, 294, 300, 
330; attitude toward Bagdad 
Railway, 66, 94, 153-169; in¬ 
vestments in Turkey, 154- 
155; spheres of interest in 
Near East, 293-294, 302; 

mandate for Syria and Cili¬ 
cia, 302, 320, 325 ; rivalry with 
Great Britain in Near East, 
318-329; treaty of March 9, 
1921, with Turkish National¬ 
ists, 323-324; Angora Treaty, 
324-326; policy at Lausanne 
Conferences, 329-335; attitude 
toward Chester concessions, 
333 - 334 , 345 - 


Francis I, 154. 

Franco-German convention of 
1914, 247-252, 272. 
Franco-Russian Alliance, 153, 
158-159, 168. 

Franco-Turkish Treaty of 
March, 1921, 323-324. 
Franco-Turkish Treaty of 
October, 1921. {See Angora 
Treaty.) 

Franklin-Bouillon, Henri, 324, 

329. 


Gallipoli, 8, 280, 285. 

Gaza, 288, 299. 

Genoa Conference, 329. 

George V, of Great Britain, 
258. 

Germany, railways in Turkey. 
{See Anatolian Railway, 
Bagdad Railway, Deutsche 
Bank ) ; trade with Turkey, 
101-106, 109, 118; banks in 
the Near East, 98-101; steam¬ 
ship lines in the Near East, 
36, 107-110; military missions 
to Turkey, 38, 269, 288, 297- 
298; Near Eastern policies, 
38-45, 64-65, 120-131, 261-265, 
276-279, 287-292, 297-300; 

schools and missions, 131- 
136, 145; imperialism, 39-40, 
44-52, 56, 114, 125-135, 277, 
280-281, 292 ; anti-imperialism, 
i 37-i 38 ; rivalries with Great 
Britain, 138, 175^-180, 203; 
alliance with Turkey, 271; 
propaganda, 281-282; military 
campaigns in Turkey, 285- 
290, 296-299; destruction of 
interests in Near East, 301- 
302, 314 - 315 . 

Goeben (cruiser), 278, 282. 

Golden Horn, 29, 338. 

Goltz, Field Marshal von der, 
21, 38-39, 153, 223, 282, 288, 

^289, 296. 

Gouraud, General, 323. 

Grand National Assembly, 305, 
316, 323, 325 , 33 L 333 - 334 , 
343 - 


INDEX 


359 


Great Britain, Near Eastern 
policies, n, 23, 66-67, 68-69, 
hi, 195-208, 225-228, 252-265, 
282-287, 297, 322; attitude 
toward Bagdad Railway, 66- 
67, 69, 182-201, 205-209, 261- 
265; imperialism, 122, 195- 
197, 200, 277, 282, 294, 300; 
trade with Turkey, 105-106; 
economic enterprises in Near 
East, 30, 53, 60, 117, 189-192, 
220, 261 (see also Lynch 

Brothers, Anglo-Persian Oil 
Company, Inchcape, etc.) ; 
spheres of interest in Otto¬ 
man Empire, 294, 302; ac¬ 
quisition by Bagdad Railway, 
334-335; military campaigns 
in Near East, 283-285, 286- 
287, 296-297, 298-299. (See 
also headings under “Anglo,” 
Persian Gulf, Mesopotamia, 
Suez Canal, etc.) 

Great War, 234, 275-276; role 
of Bagdad Railway in, 285- 
290, 296-299. 

Greece, n, 302, 303, 306. 

Greco-Turkish War (1920- 
1922), 306, 329. 

Grey, Sir Edward (Viscount 
Grey), in, 198, 225-227, 228, 
243, 255, 261-262, 282-283. 

Grothe, Dr. Hugo, 281, 307. 

Guaranty Trust Company of 
New York, 338. 

Gwinner, Dr. Arthur von, 114- 
115, 121, 125, 129, 141, 184, 
186, 221, 236, 247, 281. 

Haidar Pasha, 298, 325. 

Haidar Pasha-Ismid Railway, 
30, 31, 80. 

Haidar Pasha Port Company, 
86, 112. 

Haifa, 246. 

Hakki Bey, Ismail, 219. 

Hakki Pasha, 254-255, 261. 

Haldane, Lord, 198, 254. 

Hama, 72. 

Hamburg-American Line, 108- 
109, 141. 

Hanotaux, Gabriel, 241-242. 


Hatzfeld, Count, 38. 

Hedjaz, 284, 299, 302. 

Hedjaz Railway, 21, 27, 246, 
302. 

Helfferich, Dr. Karl, 52, 97, 
141, 225, 236, 247, 249. 
Heraclea, 246; coal mines of, 

14, 324.. 

Hilfsverein der deutschen Ju- 
den, 136. 

Hirsch, Baron, 32. 

Hittites, 12. 

Holy Land, 6, 299. (See also 
Palestine.) 

Holy War, 278-279, 281. 

Homs, 72, 246. 

Huguenin, M., 63. 


Immigration, 234. 

Imperial Ottoman Bank, 59, 
93, 117, 245, 246-248. 

Imperialism, 3, 5-8, n-12, 45- 
52, 114, 235-236, 267, 279-280, 
292-296, 306, 316-318, 331, 
337 ; 338 , 350 . (See also Im¬ 
perialism as sub-topic under 
France, Germany, Great Bri¬ 
tain, Italy, Russia, United 
States.) 

Inchcape, Lord, 109, 192, 256, 
258-260. 

India, 7, 126, 178, 195, 196, 282, 
283. 

Industrial Revolution, 13, 45- 
46. 

Industry in Turkey. (See Tur¬ 
key, industrial backward¬ 
ness.) 

Interallied Commission on 
Ports, Waterways, and Rail¬ 
ways, 300. 

Interallied Financial Commis¬ 
sion, 303. 

International Court of Justice, 
350 . 

Irak, 16, 108, 277, 326. (See 
also Mesopotamia.) 

Irrigation, 16-17, 98, 117, 205, 
221, 256, 263, 297. 

Ismet Pasha, 333 - 334 - 

Ismid, 14, 305. 


360 


INDEX 


Italy, trade with Turkey, 105- 
107; imperialism, 11, 173-174, 
218, 295, 300, 330; Tripolitan 
War, 246; economic interests 
in Turkey, 266-267; spheres 
of interest in Near East as 
defined by secret treaties, 
285, 295, 302, 305; treaty of 
1921 with Turkish National¬ 
ists, 324. 

Jackh, Ernst, 204-205, 279, 281, 
307 . 

Jaffa, 30, 72, 246, 299. 

Jagow, Gottlieb von, 254, 268. 

Jastrow, Morris, 142. 

Jaures, Jean, 242. 

Jericho, 299. 

Jerusalem, 30, 72, 299. 

J erusalems-V erein, 132, 135. 

Jezirit-ibn-Omar, 327. 

Joffre, Marshal, 268-269. 

Johnston, Sir Harry H., 205- 
206, 215, 254. 

Kaisarieh, 272, 340. 

Kapnist, Count Vladimir I., 58. 

Kapp, Wolfgang, 141. 

Karaman, 72. 

Kars, 316. 

Kaulla, Dr. Alfred von, 31. 

Kemal Bey, Yussuf, 325. 

Kemal Pasha, Mustapha, 298, 

303 , 323, 347 - 

Khanikin, 58, 75, 240. 

Kharput, 73 , 246, 340. 

Kiderlen-Waechter, von, 239. 

Kilometric guarantees, 31, 33, 
77 - 78 , 85, 90, 245. 

Kipling, Rudyard, 137. 

Kitchener, Lord, 283. 

Klapka, M. de, 247, 249. 

Konia, 14, 33, 62, 72, 281. 

Koweit, 4, 180, 197-198, 255; 
Sheik of, 181, 223, 255, 

284. 

Kiihlmann, Herr von, 255, 259, 
261. 

Kurds, 9. 

Kurna, 284. 

Kut-el-Amara, 226, 261, 286, 
289-291. 


Land of the Two Rivers. (See 
Mesopotamia.) 

Langenieux, Cardinal, 162-163. 

Lansdowne, Lord, 69, 93, 122, 
184, 197 . 

Lausanne Conferences (1922- 

1923), 306, 329 - 333 , 334 - 343 - 

League of Nations, 327, 350. 

Ledochowski, Cardinal M. H., 
144. 

Lee, Lord, 329. 

Lichnowsky, Prince, 139-140, 
146, 255, 262. 

Lloyd George, David, 199, 242- 
243, 3io, 320, 351. 

Ludwig Loewe & Company, 37, 
101. 

Lynch Brothers, 74, 81, 82, hi, 
190-191, 210-211, 256, 260. 

McMahon, Sir Arthur H., 284. 

Macedonian Railways Com¬ 
pany, 113. 

Mackensen, Dr., 34. 

Mackensen, Field Marshal von, 
297. 

Mahmoud Pasha. 60. 

Mandates, 302, 320, 325, 327, 
348 . 

Manissa, 30. 

Maude, General Sir Stanley, 
296, 297. 

Meade, Colonel, 198. 

Mecca, 21, 62. 

Medina, 21. 

Mendeli, 261. 

Mersina, 19, 72, no. 

Mersina-Adana Railway, 30, 
109, 321. 

Mesopotamia, 32, 35, 51, 124, 
140, 147, 152, 176, 180-181, 
226, 234, 256, 262-266, 277, 
280, 282, 284, 288, 327; trade 
routes, 1-2; natural resources, 
14-17; Bagdad Railway in, 
73-75 J German steamship 
service, 108-109; military 
campaigns, 286-287, 289-290, 
296-299; British sphere of 
interest, 294-295; British 
mandate for, 302, 320; Brit¬ 
ish Civil Administration, 297, 


INDEX 


361 


326. ( See also Persian Gulf, 

Shatt-el-Arab, Koweit, Irak.) 

Metternich, 295. 

Middle East, 3, 178, 196. 

Militarism, 268-271, 275-276. 

Milyoukov, Professor, 315. 

Minerals in Turkey, 13-15, 50- 
51» 280, 340. ( See also 

Chrome, Oil, Turkey, min¬ 
eral resources.) 

Missions and missionaries, ef¬ 
fect on Turkey, 6; in support 
of the Bagdad Railway, 131- 
133, 141; German, 132-133; 
French, 133, 135, 160-165; 

Italian, 133, 173-174; Amer¬ 
ican, 336. 

Mittel-Europa, 277, 290, 292. 

Mocha, 10. 

Moltke, General H. K. B., 145, 
176. 

Morgen, Major, 34. 

Morley, Viscount, 207-208. 

Mosul, 2, 12, 62, 73, 261, 305, 
321, 327, 332 . 

Mount Stephen, Lord, 184, 209. 

Mudania armistice, 306. 

Mudros armistice, 299. 

Mutius, Herr von, 109. 

National Bank of Turkey, 220, 
261. 

National Pact, 304-305, 316. 

Nationalism, 267-268; Balkan, 
7; German, 136-137, 163; 

French, 136, 163; Italian, 

173 - 174 ; English, 211; Turk¬ 
ish, 222, 275, 278, 303-304, 
314. ( See also Young Turks, 
Pan-Turanianism, Kemal 
Pasha, etc.) 

Naumann, Friederich, 127. 

Near East. ( See Ottoman Em¬ 
pire, Turkey, Middle East.) 

Neuflize, Baron de, 247. 

Neutral Zone of the Straits, 

329. 

Nicholas, Grand Duke, 290, 293. 

Nicholas II, Tsar of Russia, 
239 . 

Nineveh, 73, 137. 

Nisibin, 73, 246, 325, 327. 


Nixon, General J. E., 286. 

Northcote, Sir Stafford, 178. 

North German Lloyd Steam¬ 
ship Company, 107. 

O’Connor, Sir Nicholas, 60. 

Oil, 14-15, 50-51, 147, 261, 282- 
283, 286, 294, 321, 332, 338, 
340 . 

Open Door, 83, 125, 263, 326, 
339 - 

Oriental Railways, 18, 29, 32, 

113. 

Osmanie, hi. 

Ottoman-American Develop¬ 
ment Company. ( See Ches¬ 
ter concessions.) 

Ottoman Civil List, 15. 

Ottoman Empire, economic, 
strategic, and religious im¬ 
portance, 4-17; military sys¬ 
tem, 26; partition of, 285, 
293-295, 302-303; abolition of 
Sultanate, 306. ( See also 

Turkey, Abdul Hamid, Otto¬ 
man Public Debt Administra¬ 
tion, etc.) 

Ottoman General Staff, 22. 

Ottoman Ministry of Public 
Works, 31, 32, 81, 246. 

Ottoman Ports Company, 260. 
(See also Inchcape.) 

Ottoman Public Debt Admin¬ 
istration, 11, 31, 32, 81, 303, 
305; railway policies, 17-20, 
29. 

Ottoman River Navigation 
Company, 258. ( See also 

Inchcape.) 

Oulu Kishla, 340. 

Palastinaverein, 133. 

Palestine, 280, 294, 298, 319- 
320; British mandate, 302. 

Palmerston, Viscount, 176-177. 

Panderma, 221, 245. 

Pan-Germanism, 35, 103, 281; 
support of Bagdad Railway, 

136-137.. 

Pan-Islamism, 64, 87, 222, 276. 

Pan-Slavism, 164. 

Pan-Turanianism, 222, 237. 


362 


INDEX 


Parker, Alwyn, 261. 

Peninsular & Oriental Steam 
Navigation Company, 192, 
256. 

Persia, 73, 122, 196, 239-240, 
255 . 

Persian Gulf, 2, 74, 255, 263, 
280, 282, 322; British stra¬ 
tegic interests, 196-199, 211- 
212. (See also Koweit, 
Shatt-el-Arab, Anglo-Persian 
Oil Company.) 

Petroleum. (See Oil.) 

Pichon, Stephen, 224, 243. 

Pobedonostsev, 58. 

Poincare, Raymond, 333. 

Ponsot, M., 249. 

Potsdam Agreement, 199, 239- 
244. 

Pressel, Wilhelm von, 18, 26, 
30 . 

Propaganda, 281-282. 

Quai d’Orsay, 169, 245, 247. 

Radek, Karl, 130. 

Railways, military value of, 22, 
176. (See Abdul Hamid, 
Anatolia, Cilicia, Syria, Meso¬ 
potamia, Anatolian Railway, 
Bagdad Railway, etc.) 

Ras el Ain, 114. 

Rathmore, Lord, 260. 

Rechnitzer, Ernest, 60, 85-86, 

87. 

Reparation Commission, 301- 
302. 

Repington, Colonel, 283. 

Revelstoke, Lord, 184, 209. 

Reventlow, Count zu, 140-141. 

Rhodes, Cecil, 67, 178. 

Richelieu, 295. 

Rchrbach, Dr. Paul, 15, 16, 27, 
120, 125, 127, 128, 136, 213, 
218, 287. 

Roosevelt, Theodore, 243. 

Rosenberg, Baron von, 249. 

Rouvier, M., 157, 167, 169. 

Royal Dutch Petroleum Com¬ 
pany, 261. 

Russia, Near Eastern policies, 

7, 11, 23, 42, 147-153, 239-244, 


315-318; attitude toward Bag¬ 
dad Railway, 65-66, 147-153; 
Potsdam Agreement with 
Germany, 199, 239-244; en¬ 
tente with Great Britain and 
France, 153, 158-159, 168, 204;-^ 
imperialism, 7, 9, 15, 23, 61, 

65, 127, 151 - 153 , 166-168, 177 , 
183, 212, 240-241, 269, 276, 
278-279; spheres of interest 
defined by secret treaties, 
285, 293; Soviet Republic and 
the Near East, 3 x 5-3i8. 
Russo-Japanese War, 3, 153. 
Russo-Turkish War of 1877, 
150, 152. 

Sadijeh, 73, 75, 114, 240. 

Samarra, 73, 297. 

Samsun, 31, 246, 339. 

Sanders, Field Marshal Liman 
von, 269, 278, 299. 

San Remo Conference, 320. 

San Remo Oil Agreement, 321. 
Sarolea, Charles, 131. 

Sazonov, 239. 

Sazonov- Paleologue Treaty, 

293. 

Scheidemann, Philip, 130, 137, 
214. 

Schoen, Baron von, 93, 101-102, 
120, 125, 130-131. 

Seljuk Turks, 72. 

Sericulture. (See Silk.) 
Shatt-el-Arab, 2, 74, 81, 264. 
Sherif of Mecca, 87, 284. 

Siemens, Carl von, 141. 

Siemens, George von, 31, 41, 
68, 121. 

Silk, 20, 158, 294. 

Simplon-Orient Express, 300. 
Sinai Peninsula, 4, 21, 27, 285. 
Sivas, 31, 246, 303, 339 , 340. 

Slav Peril, 242. 

Smith, Sir Henry Babington, 

188, 209, 227. 

Smyrna, 4, 19, no, 302, 303, 
306, 324. 

Smyrna-Aidin Railway, 30, 84, 

189, 260, 264. 

Smyrna-Cassaba Railway, 30, 
34 , 53 , 59-6o, 245. 


INDEX 


Societe Sexploitation des chem- 
ins de fer de Cilicie-Nord 
Syrie, 326. 

Societe du chcmin de fer de 
Damas-Hama et prolonge- 
ments, 34, 246. 

Societe du chemin de fer otto- 
mane d’Anatolie. (See Ana¬ 
tolian Railway.) 

Societe frangaise de Heraclee, 

! 4 - ^ 

Societe imperiale ottomane du 
chemin de fer de Bagdad. 
(See Bagdad Railway Com¬ 
pany.) 

Societe pour la construction et 
Sexploitation du reseau de la 
Mer Noire. (See Black Sea 
Railways.) 

Societe pour enterprises elec- 
triques en Orient, 99. 

Soma, 30, 245. 

Soma-Panderma Railway, 221, 
245 - 

Speyer, Edward B. von, 141. 

Spheres of influence, 277, 294, 
295, 302. 

St. Jean de Maurienne Agree¬ 
ment, 295, 302, 311. 

Stahlwerksverband, 103. 

Standard Oil Company, 15, 
232. 

Stemrich, Herr, 34. 

Sublime Porte, 43, 55, 149, 247, 

^ 252, 261. 

Subsidies, railroad, 75-80. 

Suez Canal, 2, 3, 4, 21, 27-28, 

1 77 , 178, 192, 195 , 204, 259, 
277, 282, 283, 285, 290. 

Suleiman the Magnificent, 7. 

Suleimanieh, 340. 

Sykes, Sir Mark, 251, 272-273, 
295 . 

Sykes-Picot Treaty, 293-294, 
310. 

Syria, 2, 11, 280, 288, 302, 320, 
323, 328; railways of, 30, 34, 
245-246, 248-249, 326; mili¬ 
tary campaigns, 299; French 
sphere of interest, 293-294; 
French mandate, 302, 320, 
325 . 


363 

Tardieu, Andre, 169-170, 203, 
214, 267-268. 

Taurus Mountains, 72, 94, 113, 

149, 288. 

Tchoban Bey, 327. 

Teheran, 75, 240. 

Tekrit, 73, 294. 

Thrace, 305, 306, 324. 

Tigris River, 2, 74, 81. (See 
also Lynch Brothers.) 
Tireboli, 239. 

Townshend, General Sir 
Charles, 286, 287, 289, 290. 
Trade routes, 2, 71. 
Trans-Caspian Railway, 2, 150. 
Trans-Caucasian Railways, 2, 

150. 

Trans-Persian Railway, 2, 147. 
Trans-Siberian Railway, 2, 3, 

4 , 14 7 , 150. 

Treaty of Berlin (1878), 149, 
162-163. 

Treaty of Bucharest (1913), 
246. 

Treaty of Lausanne (1912), 
267. 

Treaty of London (1915), 285, 
302. 

Treaty of Sevres (1920), 301, 
305 , 306. 

Treaty of Versailles (1919), 
301. 

Trebizond, 246, 339. 

Tripartite Agreement (Great 
Britain, France, Italy, 1920), 
301. 

Triple Alliance, 107, 271. 

Triple Entente, 275. 
Tripoli-in-Syria, 72, 246. 
Tripolitan War, 246. 
Turco-Italian Treaty (March, 
1921), 324. 

Turkey, agricultural conditions, 

5, 12, 13, 15-16, 18, 20, 230- 
232; industrial backwardness, 
12-13; general economic con¬ 
ditions, 12-17, 233-234; fi¬ 
nances (see Ottoman Public 
Debt Administration) ; min¬ 
eral resources, 13-15, 50-51, 
280, 340; foreign trade, 36, 
104-107, 339; alliance with 


364 


INDEX 


Germany and Austria, 271; 
entry into Great War, 275- 
278; as spoils of war, 280- 
281, 285, 292-295, 301-302; 
military campaigns of 1920- 
1922, 305-306; a republic, 306. 
(See also Ottoman Empire, 
Anatolia, Cilicia, Syria, 
Mesopotamia, Grand Na¬ 
tional Assembly, Angora 
Treaty, Lausanne Confer¬ 
ences, etc.) 

Turkish Petroleum Company, 
261, 321, 353. 

Union and Progress, Commit¬ 
tee of, 217, 219. 

United States of America, rail¬ 
road subsidies, 79; economic 
changes since the Great War, 
337-338; American interests 
in the Near East, 336, 337- 
338 (see also Chester con¬ 
cessions) ; naval activity in 
Near East, 346-347; outlook 
for American imperialism, 
337 - 338 , 347 - 350 . 

Van, 246, 340. 

Wangenheim, Baron von, 43, 
270, 278, 282. 

Washington Conference (1921), 

329. 


Weygand, General, 333. 

Wilhelmstrasse, 121, 133, 142, 
201, 236, 247, 254. 

Willcocks, Sir William, 16, 205, 
214-215, 220-221. 

William II, German Emperor, 
142, 198, 298, 349; imperial¬ 
istic policies of, 39-40, 44-52, 
349; visits to Turkey, 41, 43- 
44. 55 , 134 - 135 ; and Bagdad 
Railway concession of 1899, 
68 . 

Wilson, Woodrow, 291, 336. 

Witte, Count, 58, 68, 149-150. 

Wurttembergische Vereinsbank, 
31 . 


Young Turks, 5, 13, 17, 110- 
iii, 217-218; hostility to Ger¬ 
mans, 220-224; financial diffi¬ 
culties, 224-229; efforts to 
conciliate France and Great 
Britain, 244, 252-261; hos¬ 
tility to imperialism, 267. 

Young Turk Revolution, 27, 
96. 

Youmourtalik, 340-341. 


Zander, Dr. Kurt, 68. 
Zihni Pasha, 68. 
Zinoviev, M., 65, 149. 
Zubeir, 75. 


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